When you say, "-took apart intake, threw out K&N filter", how far down the intake did you go? Did you get all the way down to the lower rubber intake boot, the one with the main hose going into the intake manifold and the secondary hose going into the Idle Control Valve? That's the one that usually cracks and leaks.
The spray-the-carb-cleaner trick didn't work for me on my (sold) '01 325i, and it had a thumb-sized hole in the small hose of the lower intake boot. Replacing that boot stopped the whistle and cleared the codes.
I think your next step should be a smoke test: Either pay a shop to do it, or build a simple one out of an air compressor, a diesel glow plug, and some smoke machine liquid (and assorted cans and tubing). jbeurotech has posted some simple instructions on doing this.
Also, if the oil light turns on YELLOW for a brief period after starting the car, and you are 100% CERTAIN THAT YOUR OIL LEVEL IS CORRECT, then you probably should replace the oil level sensor which is located near the drain plug in the sump pan. If the light turns on RED, then it's an oil PRESSURE problem and you should start panicking.
Last edited by nathancarter; 12-17-2008 at 05:41 PM.