weird things happen and unfortunately you found that out. A "mis-casted cylinder"? and they are waiting for ONE to come in? You don't just replace a cylinder, you have to replace the whole engine block. Hopefully they told you the right thing. Anyway, it can happen. While the engine blocks are maufacture by a computer, we all know what happens when those $%^& computers have a bad day. Sounds like from what the dealer is saying is that one of the cylinders was not casted properly which either means it either was not truely "round" which would allow compression loss, oil consumption and smoke through the exhaust. Or from your description of smoke from under the hood (and sorry Mr White G), it could very well be because of a miscasted cylinder. If the cylinder liner was not properly installed and even .010'' above the deck surface of the block, this would create an oil and even possibly a coolant leak onto the exhaust which would then create the burning oil and smoke that you were experiencing. And contrary to the wisdom here on the board, DON'T take the car to an independent shop. The moment one of those guys even cracks the oil cap on the engine, BMW will not grant you the warranty. Let BMW pay for the engine rebuild and demand an extended warranty at least. If you have problems ever again with the engine, take it back a couple of times and envoke the lemon law. It sounds as if the dealer you took your car to is at least reasonably competent due to the fact that when they actually looked at the car, they found the casting defect.
Take a deep breath and realize all is not lost and this should only just be a postponement to your thrills of driving your new BMW. It should be good as new when you get it back.
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