Actually the lemon law applies if you have taken the car to the dealership 3 times with the SAME complaint. Regardless if anything was done. Now that it is determined what is wrong, that justifies the lemon law.
very interesting information on valvetronic and VANOS....
God BMW made this more complicated that it needs to be. Go read how VVT-i works or VTEC, both are WAY more simplistic in design. Honestly look at how it works, if your essentric shaft is the issue, then no it would never give you a CEL.
here is the break down of our valvetrain.
Using the other link you can see how they interface and work together. It sounds like you might not actually have an essentric shaft problem per say. I believe your issue began as a lubrication issue. Grinding is only created by metal on metal contact. There is no other explination for it. Therefore your engine lubrication system is probably severely damaged. That being said, I would be willing to bet your entire valvetrain is damaged. There will most definitely be extensive damage to your lifter assymblys. Since the camshaft is still the driving force for lift our motors, it would reasonable to assume that is where the extent of the grinding and damage has come from. I would definitely FORCE them to pull the valve cover off. I have a feeling your head will need extensive overhaul. Honestly, getting a new head will be cheaper than a new motor. Not to mention much easier to replace. That is assuming the lower portion of your engine has not sustained any damage as a result of improper lubrication.
It is important to note that the essentric shaft does NOT rotate 360 degrees. It is not capable of doing so as per the drawings and actual pictures I have seen. Therefore it is safe to say that the grinding is most definitely not from there. I would get a second opinion on your car. Take it to a shop that will actually pull the valvecover and look to see what is damaged. That is the best course of action. If you cannot afford it or do not want to pay for that. Do it yourself. Its a very simple task, and then have the car towed to a dealer with the valvecover off. Since it seems BMW is not interested in helping you currently.