The situation has been resolved. I got the dealer down to $1000 for the parts and installation for both the water pump and thermostat. That was roughly the same price as the local INDYs are charging and I didn't have to hassle with getting the car towed over there.
I'm not happy about this but $1k sure as hell beats $1.5k and I can count on the quality of the work from the dealer.
Specs: '07 335i sedan|6sp Manual|Sparking Graphite Metallic|Black Leather|Aluminum Trim.
Options: Premium|Sport|Cold|iDrive|Comfort Access|Power Rear Sunshade|Park Distance Control|Satellite Radio|iPod|Logic7.