Here is an update on my situation. In December, at 53k miles and after I bought it off lease, I noticed the engine sounded funny and the "drivetrain malfunction" warning came on. I took it to the local independent BMW shop and they diagnosed valvetronic motor error and quoted $1,400. I called BMW and the service rep told me I was SOL since out of warranty. Once the shop started to take it apart they said there were major issues with the timing chain and said it would be expensive. I called the local BMW Dealer and asked for the service manager. I explained what was going on and he said "STOP! BRING IT HERE!" and I told him it was "slightly" apart at the moment. I called the independent shop and told them to put it back together and a tow truck would be on the way. BMW called me once the car was there and they told me it was still in pieces and I was like WTF? Called the independent and they said they left it apart for BMW. So the drama starts. BMW said they couldn't diagnose it so I agreed to pay to have the engine put back together AFTER agreeing to pay $500 to take it apart at the other place. After a week, BMW said it would cover the work and my cost would be about $800 out the door.
Got the X3 2013 back today and this was what was done: Catastrophic damage to timing chain is present, cams ok, vanos not. Recommended timing chain, oil pump with drive, vanos units and valvetronics to start. Then, removing 5 screws from oil pan broke as one oil pump drive bolt. 3 injectors were stuck, breaking off in head.
The service rep said she was glad I brought it in at 53k as if it was 60k not sure what they could have done. I estimated it was $5,000 in labor and whatever the parts cost to replace it. So, overall got a nice remodel of the engine for $1,200.
Now the question is do I keep it or trade it in?