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Wow. Looks similar to when my output shaft broke on my F80 M3, although that was launching it at a drag strip.
I'm not familiar with stock M8 tire sizes, and don't know what wheels you have on the car. Perhaps if they're not the same overall diameter it might be a reason for BMW to deny the claim. Either way, BMW has to prove something YOU did was the cause for the axle to fail. What did the dealer say? Usually they are your go between for these matters. If they've already taken it to BMW and it's an official NO from them, I'd hand it to your lawyer. Should be an easily remedied issue, if you didn't do anything to void your warranty. Best of luck!
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