I've got the ABS, 4x4, DSC errors on my 07 328xi. BavTech scans error as something like "Transfer case-clutch position unknown" or something close to that. As some have noted, I wonder if it's this motor mentioned above. The part isn't too severely priced (although it still is pricey) on getbmwparts for $370. That part comes up for a 5 series, but I understand they all use the same part (someone please correct me if I'm wrong). If you search 3 series on getbmwparts, it only lists the whole transfer case.
Blacksail (or anyone else who has done this), did you replace the motor? How hard was it? How many hours to do? Did you have to drop the transfer case, or could you get to it without removing exhaust, heat shields, transfer case, etc.?
Also, the only thing I can think of (instead of ABS controller or transfer case) is that my intelligent battery sensor wire is broke at my battery. I need to put a new connector on it. I don't know if this is related to my 4x4 issue (and I can't recall if something happened to IBS to cause this 4x4 problem), but maybe? Anyone know?
BTW, my car makes NO grinding noises at all. It acts as if it were just a 2wd drive car. No noises, grinding, etc. from transfer case.