Every BMW that is CPO certified goes through a number of inspections to make sure it is up to BMW qualifications. If this is CPO certified, there is documentation, and if you don't believe them, you should ask for it from the Service manager.
I highly doubt you have a lemon, I have never seen an e46 (2004) 330Ci Coupe that was bad. It probably is just a belt or something that is causing the noise in the engine, and maybe the rotors or breakpads need to be looked at or changed since it is making that squeeking sound. Which should be free under the CPO.
I'd call and talk to the manager on Monday and if you aren't satisfied with talking to them, then I would bring it in and talk to them in person on Monday. Seems like they are somewhat trying to work with you, they're giving you a loaner....if they didn't like you they would have screwed you over and not given you one. So try and talk to them to get it resolved. It'll be alright. Probably something minor.
We have a different department that fixes up rock chips and cleans the cars for "showroom" delivery. Maybe you can go to that department and see what they can do.