Great news. I was just approved to have 3 of my wheels replaced by BMW. My dealer is BMW of Sterling in Virginia. I had to wait for a BMW rep to look at the wheels and he approved the replacements. I feel extremely lucky. My 2000 M5 only had two months remaining on the factory warranty.
I can't help but think that my great relationship with Chris the service manager is mostly responsible for approval. He used to be my SA. However, he was recently promoted. He is a real M5/M3 lover who always provided the best service!
My wheels had somehow started to show black streaky marks that covered most of the three wheels that were damaged. For some reason my passenger side rear wheel was not effected.
Good luck to those who have similar problems.