Can OBD Readers Cause Problems?

[AussieXer]

Drive my newly acquired E53 4.8is yesterday and noticed the Engine warning light was on. Checked my owner manual and noted that it said "Deterioration of exhaust emission values". I immediately suspected oxygen sensors which was odd as the previous owner had recently replaced them, so I decided to plug in the OBD reader (Tech2) that I had used on my previous car to see if I could get more information on which one/s were causing the problem. I now wished I had not done it because all hell broke loose. The screen on the reader remained blank but immediately the following occurred:
*Alarm (high pitched monotone) went off
*Message "Self leveling suspension inactive appeared on screen"
*A great many warning lights lit up on screen (including engine light)
*Lights went on on the left hand rim of the tacho
*None of the remote buttons on key would operate
*Lights indicating which gear you are in next to gear shifter no longer visible
*Cannot open tail gate either with key, button on remote or buttton on tailgate.
*Interior lights no longer come on when you open the door.
etc, etc
Despite all this car will run and drive and suspension height looks about right.
The introduction of the OBD reader may have been a coincidence but I doubt it. My preliminary research has should that some OBD readers have caused problems in the past but surely not this sort of chaos.
Hope there is someone out there who can make head or tail of all this and at least offer some suggestions.

AussieXer