Isn't this a continuation of the "Isn't stevens creek wonderful" lovefest?
http://www.xoutpost.com/bmw-sav-foru...-resolved.html
They sold you a CPO car with defects at the time of the sale. It isn't like this stuff jsut started. Something smells wrong.
I'd return the car, then sue them for the lojack and extended warranty. Won't take long for a judge to side with you, IMO.
Edit: I actually think they are bluffing. Tell them they can have it back, see what they say.