Sounds like its time for a rebuild...your worst fears realized. However, I had a similar issue with the exact same car only I had the trifecta lights ....anyway, it was my front wheel speed sensor. You can also try a fluid and filter change. An oem filter and gasket kit is only $50 on ebay and its a fairly easy and straight forward procedure you can do yourself. So there are a couple things you can do yourself for under $200 ....although I doubt its gonna help, but it might...I've seen stranger. If you take it ro a transmission shop make sure they specialize in BMW . The average tranny repairman at your local AAMCO is gonna screw your car up worse and then charge you for it.