I wouldn't bother with BMWNA at all, they are in no way involved. It was an honest mistake made by a dealer, and they need to stand behind it.

Warranty on their work means service warranty, not engine warranty. It means that if they put it in incorrectly, they stand behind that. Doesn't mean the engine won't fail from a cause unrelated to the transplant.

To be fair though, there was no warranty on the old 2005 engine, so I am not sure why the future risk is different with a one year newer engine (unless the mileage is significantly greater)

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2007 X3 3.0si, 6 MT, Premium, White

Retired:
2008 535i, 6 MT, M Sport, Premium, Space Grey
2003 X5 3.0 Steptronic, Premium, Titanium Silver
2002 325xi 5 MT, Steel Grey
2004 Z4 3.0 Premium, Sport, SMG, Maldives Blue