AC Compressor Gone?

First post to this NG. My '99 328i with 42K miles has finally had its first hick-up. Last week upon a 30 mile trip in moderate heat I had my AC On. AC in this car was perfect. Upon exiting the freeway and stopping at the first light, my engine shut off and CEL came on. When I tried to start it again, it did, but with some nasty noises from the engine bay and then promptly shut down again. I opened the hood and smelt something burning. Upon poking around, I found the clutch area of the AC compressor is the area that the burning smell was originating. When I shut down the AC and started the car again, it ran fine. A couple days later I turned the AC switch on, and the engine ran normally, but I wasn't brave enough to let it run longer and see if it still cools, because someone told me I can wipe out the belt if the AC Comp clutch seizes. My friends and a mechanic I spoke to thinks my AC compressor is history. The dealer quoted (pre inspection) $1700 for a rebuilt AC compressor, belt, receiver and dryer. Ouch. To diagnose it correctly, they want $110. Ouch. And I don't see myself doing the job. Anyone have any ideas on what this could be? Another mechanic told me that in 7 years of working on bimmers, he hadn't seen a busted AC compressor. I live in the Detroit/Windsor area. If anyone can recommend any reliable German car shops, I would appreciate it as well. Thanks.