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As with many things on modern BMWs, it was an electrical problem. It had nothing to do with the transmission. The not-so-technical explanation from the SA was that my X3 was crashing the CAS module when I pushed the start button and it tried to wake up. After many hours of diagnostics, the problem turned out to be both the starter and the starter ground strap. From the service report: "when the starter is unplugged KL15 stays on" (this is good). Also "found starter ground strap corroded causing voltage to bleed into VTG and taking out KL15WUP signal".
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