It does sound like a mechanical problem. Although I'm not sure if this helps but, on older MB automatics, they have something called a "neutral safety switch" which causes the EXACT same symptoms as yours. Basically what happens is that the shifter sensor thinks it's still in drive (even if the transmission isn't) and prevents the car from starting. The ignition locks out as well.
I don't know if 'matic Bimmers have this as well, but it might be worth a shot.
Another test, is to try to reinstall your old chip... maybe your mate is right!