Yes you can negotiate the ED price. You will have to find a dealer that will work with you though because some stick strictly to the pricing on the BMW website. To calculate ED pricing, take the base price and multiply by .86 Then multiply all options by .93 That will give you the ED invoice price of the car.
$500 over ED invoice is pretty standard. There is a ton of info on ED over at Bimmerfest. Link below:
http://www.bimmerfest.com/forums/forumdisplay.php?f=25