Thanks Cyclerob,this is quite interesting.
I just got back from the dealer. The DOT 4 clutch fluid was full of silver particulate as you indicated. They suggest that when they changed the fluid out in March, must of somehow got the slave cylinder seals jammed and now the slave cylinder must be replaced. Hmmmm
The bike new went into service 8/30/03. I bought it 9/05 with 3700 miles on it. At some point BMW changed the service interval for clutch fluid from every two years to every four years. So even though I was five months early I had the fluid changed in march. Now I have a bad slave cylinder which is $130.00 for the part and 2.5 hours labor.
Since I have owned the bike it has never sat for more than 3 weeks without a good 20+ mile run in the winter. 4 or 5 rides a week in the summer, plus some trips like the beakster bash!

, which I missed this year
Since the bike has 8800 miles on it, I suggested to the dealer that I would appreciate some support from BMW. I suggested that BMW cover the parts and I cover labor. The dealer was quite sure BMW would offer nothing. I'm wondering since BMW changed the service interval to four years could they have changed the material of construction of the slave cylinder from AL to AL plus a coating, or SST? The bike is out of warrenty but I changed the fluid at 3 years, 7 months. I suppose the first owner ( kept it completely stock) could of rode 3700 miles in the first year and it sat for a whole second year, which would be worse case. Bad luck for sure but heads up to everyone that waiting 4 years to change the clutch fluid isn't a good idea no matter whatt BMW says.