Trunk closed, but light keeps blinking with trunk open and the chime.

Trunk latch acuator motor has gone bad. Small switch inside them fail and cause the problem you are describing. Its a $70 part. Its also relatively easy to change out. http://m.oreillyauto.com/h5/r/oap/site/c/detail/DOE0/937866/06588.oap?year=2008&make=BMW&model=528i&vi=1440190&ck=Search_Trunk_06588_1440190_2397&keyword=Trunk&pt=06588&ppt=C0329

I had the same issue. It was the wiring from the trunk lid to inside the trunk. Cut the rubber insulator right where the lid meets the body on the right side and open it up to see. Reconnect any broken wires. Should work.