Drew - I spoke with our IBM support and he basically reiterated your recommendation - create a table in DB2 and then write the report off of that result table. Much cleaner and easier to sort through.
I also spoke with our ERP (BPCS) support - and they confirmed that I'm not reinventing the wheel - they do not have a flattened bom anywhere in the system already (I'd looked for it, but couldn't find it.)