Got the X3 to the dealership this morning. The error code for the transmission indicates it is the clutch. The dealer is contacting BMW to determine how to proceed given the low miles on the car (4,000). Apparently the question is whether just the clutch should be replaced or the entire transmission.
As a side note, I was given an X3 28i as a loaner and it is much quicker from a start than my 35i. Makes me wonder if my transmission was faulty from the start.