Just thought i'd drop some expertise/speculation on the bottom end failure problem. Anyone very familiar with the E46 M3 internals please comment.
The problem with S54 motors burning up rod bearings, and occasionally tossing a rod is not really all that new to the design. Although it is an entirely different motor, the bottom end is very similar- almost identical- to the predecessor E36 S50/S52 Euro motors, which were also notorious for bottom end problems with rod bearings.
I personally read all 25 accounts on bimmerforums, and found it quite surprising, but at the same time i didn't. One thing i did want to say, is that when i rod bearing goes, it doesn't always go right now. One day your charging through an on-ramp and the oil pressure drops in the block for just a moment and there goes the skin off of a rod bearing. This doesn't mean that it's going to go right away though.. several people claimed they weren't driving the car hard or fast when they heard the ticking noise, then all the sudden she went. That would be the rod bearing slowly wearing through it's shell.. then, several engine hours later when you're cruising on the highway the bearing finally mills down through the copper, seizes, and spins. You would have a much more violent shutdown (throwing a rod) if this were to happen instantaneously like on the track (ask me how i know

).
Now, the exact reason why this has been happening is not known, but our best guess is the lubrication design in the block. The S50/S52 Euro motors have a dual-gallery layout in the block- one feeds rod bearings, and everything else, while another feeds the pistons sprayers. This design troubles to keep OP constant and the first area that gets robbed in the event of a pressure loss is the feed to the rod bearings (#3 in particular.. kinda like how S14's always lose #2 first) All other BMW inline 6's use a single gallery system, and spinning rods happens once in a blue moon on those engines. So, maybe it's the lube design, maybe not.. i guess BMW may or may not fess up to the real problem in the future.