Firstly I apologize for the delay in updating the thread. I had been scouting for answers all over the place, but in vain. All the links i could get online were out of the country.
I found only one place in Pune that was agreeing to 'look' at the problem and see if it was fixable. They had done some work on Merc/Audi ECUs in the past but not the particular 3 series I have so weren't sure of a sure solution. It would be only trial and error. Additionally, they would only let me know the cost of repair once they inspect the device - could range from 25-50k according to them.
In all probability, the ECU was dead anyways, so I thought why not go ahead with the attempt to repair. However, the BMW workshop people refused to disconnect and give me the ECU for repair, if I wanted it, i'd have to take the car away from them - this would mean hiring a flatbed and moving it across town, then possibly back again in case the repair attempt failed! Towing would cost me another 5k, at this stage I'm growing more and more frustrated with the increasing costs.
I try my best to crack the BMW guys, but they don't budge because of policy (which they explained to me) and i respect that. However 3 days ago I have a breakthrough & manage to convince them to let me have a look at the faulty DME myself and see if i can figure out if it can be repaired at all.
Having an electronics background, and having read about the possiblity of water damage, etc., I felt it would help to assess the extent of the damage and whether it would be worth the effort to move the car to the other garage.
So finally 2 days ago I got myself to the workshop and took a look at the part.
First look showed me telltale signs of water seepage and damage to the electronics was imminent:
Notice the corrosion on the bottom screws and cover plate, compared to the screws on the midsection and rest of the plate. The dotted line is up to where the texture/colour of the metal was different due to water damage.
Next I managed to get the lid open after wrestling with it (was stuck to the PCB with high quality silicon - so well that it bent the sheet metal!)
Once inside, this is what greeted me. You can clearly see the extent of corrosion - (the type that we see on batteries), but it is limited to the bottom part of the device (see dotted line)
I did also inspect the engine bay compartment where this is installed - it has a good drainage system and also the device itself rests about 2 inches above the bottom of the compartment, so I'm unsure how this kind of damage has occurred.
A closer view of the corrosion:
also affected some resistors+capacitors

and also an IC
anyways, Looking at it at this point of time, I'm like totally lost hope of any repair and ready to cough up the 90k for the new part, but a small engineer part of me still insisted that I should take a last chance and give it another shot.
Since the corrosive reside is a good electrical conductor, I figured it could probably be causing shorting between the IC and other parts hence causing wrong voltages to flow and generate the errors.
So I convince them (with my puppy face! lol) to let me clean up the part and see if it works, if it doesn't I'm ready to replace it anyways.
By now they have grown tired and empathetic of my situation, so they agree, but will not take any responsibility for further failures
I say OKEY DOKIE, just check if the car starts.
So that's what I eventually did - picked up some medical alcohol and a toothbrush, gave it a good cleaning, packed it up and had the technician connect it. One crank and the baby started purring like a little kitten!
They kept the car running for couple of hours to check if temp would cause any malfunction, it didn't. they cleared the existing errors and ran a diagnostic - results came out peachy!
I paid the towing charges, got into the car, drove home and shes running fine... since the last 24 hours at least!!
All in all ESTIMATED cost: 96,199/-
Actual cost: 3800/- for towing and diagnostics ++ some loose change for the alcohol and toothbrush!
but actual value is the experience gained!