After some additional research and a review of the Schematics, I suspected the USB HUB, which is under the gear selector in the center console. This acts just like a USB HUB for a PC/MAC.

It was the culprate.
Had 12v power to it, but nothing (5v) coming out of it...
Pretty easy to get to and replace (Part #84109200503 @$112) and now back up and rockin'
Total time for the repair was about 30 minutes.

Not sure why the stealership had no clue, as they had these in stock, but at least they didn't get anymore of my $$s.

Edit... They are refunding my "diagnostics charges" as well...

Thanks,
John B

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2008 4.8i X5 (2/25/08) 105k:
Titanium Silver/Black; All -HUD; Aero Kit; 22" VS-130 w/Pirellis;
///M Shifter & Fr Brakes; Gauge Rings; Console Pads; Custom Wheel & Mats; Roof Rails
Carbon Fiber: Int Trim, Nav Surround, Grill, Cluster Trim, Shifter & Eyelids
1.2" H&R; LUX AEs; LCI Tails; Rear Fogs; NBT EVO; ESS Tune; Meisterchaft GTC Exhaust