Well, my CEO got fed up with me trying to figure out the problem and took the X3 in to have the dealer look at it. Diagnosis is a leaking evaporator. Cost to replace is $3400-ish! WTH! I know this part goes bad and that it's behind the dash from the pics that I've seen on the forum here, but is that charge a tad excessive?

Also, it looks like I do have heat. I guess the last time I tired the motor wasn't warmed up enough. There's a foul smell coming from the vents though.