BMW Repair Questions? Ask a Mechanic for Answers ASAP
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the transfer case splits power between the front axle and rear axle, it can't cause one wheel to lock up.
the diagnosis is wrong, take the vehicle elsewhere, to somebody that knows this vehicle well and has the proper skills and equipment to diagnose it.
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it is possible that putting proper tyres on would correcet the issue immediately, but not terribly likely given that damage may have resulted from running different tyres already.
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damage to the differential, transfer case, transmission or other part of the drive train
you cannot dispute the fee, he has spent time on the car and that is his hourly rate.
the only places that are "approved" to work on your car are main dealers, you can find a list here: http://content.bmw.co.uk/bmwuk/dealerlocator/