went down today to see the old engine first hand and talk to the dealership (the prev pics had been emailed to me)
out with the old
in with new
and boy am I happy BMW covered this under warranty
with out them stepping up to the plate I most likely would have parted her out and bought another bike.
The issue of engine warranty for a bike with a power commander/bazaz or other aftermarket tuner is a bone of contention with BMW and from what I understand the reason if. BMW makes and sells their own "Race ECU" this is very much like have a PCV/ Bazaz or other aftermarkket tuning box only it is very much more programable and will adjust the function of more than just fueling (DTC/ABS).
But when you buy the Race ECU kit BMW requires you sign a release for your warranty, this puts them in the odd postion of warranting engines with aftermarket tuners but not their own.