Replacing battery and ignition switch did not fix the problem. Spoke with Scott at
scott@bmwgm5.com. (Great website and Great person for GM5 issues, especially if you are in the L.A. area) Scott thought issue is with "k-bus". Thanks for your time Scott!
Will disconnect battery for 2 hours to see if system will clear/reboot as others have indicated at E46 Fanatics. If not, probably off to the dealership (s@%t). Suggestions greatly appreciated!