<E36> Strange noise from brakes

[Luis Marques <marques@xxxxxxxxxxxx>]

I need a little help from the collective wisdom of the digest.  Recently
my car has developed a starnge noise whenever I apply the brakes.  It's
not very noticeable at low speeds (<10mph), but it's definitely there at
higher (>50mph) speeds.  It sounds like a groaning noise like a bad
bearing or a pad that has been worn down all the way. Other than the
noise, it seem to stop just fine. 

The car is a '97 328i and has about 15k miles on the clock.  The thing
is that the pads still have about 5mm of material left.  The dealer was
quick to recomend replacing brake pads and rotors at the tune of over
$500!! saying that they were simply worn and the rotors a little glazed
and not covered by waranty since it's a wear item.  The brake lining
idiot light has not gone off yet.  Is it really normal for the brakes to
be making this king of _very_ noticable and strange noise?  After only
15k mi. and plenty of material left?

I appreciate any inputs, especially ones that might suggest this is
something that could be covered under warranty.  TIA

Luis Marques
'97 328i

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