Well, the CD changer cable the Icelink plugs into carries analog audio to the Tuner Module.
The Tuner Module doesn't use this CD audio because it's in DSP mode (in YOUR car). In the 2005 no coax is used at all, and the DSP amp works with analog audio signals from ALL the sources, including the CDC. The DSP amp has an A/D converter inside it to work with the analog radio signals, so the CDC signals are just routed in there too. (I guess BMW figgered out that it sounded lousy either way
So, if you unplug the Tuner Module, and then remove the DSP amp, and then re-connect the Tuner Module after like 5 minutes or so, the Tuner Module comes up in NON-DSP mode, and accepts CDC analog audio no problem.
And since the Icelink emulates the CDC, it will now work fine without the coax cable or the D/A converter.