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I don't know much about Kac-Moody algebras/groups, but perhaps $PGL_2(Z)$ arises from a BN-pair through something like the following: there's a Kac-Moody Lie algebra (Frenkel-Feingold, Math. Ann. 1983) with Weyl group $PGL_2(Z)$ as desired. Then, I dunno... maybe Tits associates a Kac-Moody group (via a few constructions), and someone else (perhaps) describes "twin buildings" and BN-pairs. I'd start sniffing in those directions, if an expert doesn't weigh in. Good luck! Hoping for a better answer soon.
A comment for now. Here's a construction that doesn't work. Choose a quadratic form q over Q (the rationals) of signature (4,4) over the reals. But require q to be anisotropic at some nonempty set of finite places. Take $\Gamma$ an arithmetic subgroup of $Spin(q)$. Then $\Gamma \backslash Spin(4,4) / K$ might do it. But sadly quadratic forms in 8 variables over $Q_p$ are never anisotropic, so this fails. Similar failure for $G_2$ instead of $Spin(4,n)$. Sad!
See Lorscheid, Theorem 3.14 of his 2nd blueprints paper at arxiv.org/pdf/1201.1324.pdf. He describes $G(F_{1^2})$ in his framework, at least. For $n > 2$... why not email Lorscheid?
There should be a special tag for questions titled "A silly/naive/stupid question about [insert fancy technical topic]" which are then followed by a perfectly intelligent and well-formed question.
Some say the integral will end in pi, some say it's not so nice. From what I've tasted of periods, I hold with those who favor pi. But only if n is twice An integer or else I think, The integral won't be so nice, but still pretty great, and zetas sould suffice.
I think the condition is that $BwB \subset P w_0 P$ if and only if $w = w_1 w_0 w_2$ for some $w_1, w_2 \in W_I$. Here $W_I$ is the Weyl group of a standard Levi of $P$. See mathoverflow.net/questions/118974/… for a related question. This should give the answer to your explicit question, with a bit of work with minimal-length representatives, I think.
@TitoPiezasIII, thanks! I don't know much of anything about these continued fractions and recurrences (but now I know a bit more). I'm enjoying reading the Q&A from the sidelines.
A step towards an inductive proof: if $G$ is a unipotent $k$-group, and $c \in Z^2(G(k), Z / p Z)$ is a 2-cocycle (for trivial action), does there exist a polynomial 2-cocycle $\gamma \in Z^2(G, G_a)$ such that $\gamma$ gives $c$ upon taking $k$-points? I want to attack this one inductively with inflation-restriction with respect to $G$ and $[G,G]$. But no time for more than a sketchy comment.