If this car really had a crack value cover and had a major leak, I have only one question, how much oil was on the ground. The oil would have made it way to the ground that is for sure.
As a number of you pointed out, this is not adding up for me. Here we have an 07 car which was not put in to service until late in 08, why what was the deal with this car. Want does in service mean it could have been a dealer demo or loaner for a while since as op said it shows the car being sold in 11.
I personally would demand to see the service history on the car that BMW keeps. since something does not seem right.
Also i will point out that around 48K miles and just a few months past the 4 yr mark I rand in to a problem with VANOS and it took BMW 5 week to figure out what the issue was and 3 visit of the BMW Engineer to finally fix the car. They said the total cost was close to $5k, but BMWNA pickup with little or no fight and then would never really tell me what they fixed other than to say the replaced the entire top end. take about the VANOS timing was off and the cam showing excessive wear. The tied to say it was due to low oil, However, I had on recorded that the low oil indicator kept show low oil even though it was not low, and I asked to have the oil change each year the the dealer refused since it was not showing it needed done, I forced them to change it.
Based on my experience, I think something in this car when wrong related to the VANOS it locked up and cause the engine to rip itself apart. They documented that the OP had a oil issue just in case this happen, sound like they were trying to get him past the 4 yr mark.