Hi Gold,
Sorry to hear it wasn't the cap, but the fact that this is intermittent really does make me think that it's still air in the system. That bleeding procedure seems arduous, but if it solves the problem, by all means try it!
I also found this thread from this forum that might also give you some pointers :
http://www.zpost.com/forums/showthread.php?t=538686
The bottom part has some info specific to bleeding - this may be a useful supplement for the procedure you found.
Pelican parts also has a faq on this stuff at
http://www.pelicanparts.com/bmw/tech...lant-Flush.htm
It's more geared towards the e36, but the info maybe helpful in filling some gaps if you try this out.
This the time I miss the old iron heads- aluminium may be lighter, but those iron heads could take more of a beating before warping/cracking/exploding. Hopefully your block is still ok and this is all caused by a rogue bubble!
Good luck!