To answer one of the OP questions, no, the E85's, E86's and E89's are not known for engine failures through sludge - this is the first instance I've heard of on this forum, and it never came up as a problem area when I researched the models before buying.
As others have said, sounds like either poor maintenance/cost cutting/contaminants and I don't think being a Z4 is a factor. What mileage were the services done, and what mileage is it on presently?