i think ur car uses a heater core. Check your coolant level?
maybe you have a fuse blown. OR...i had this problem in our volvo. Your car has a air mix control, usually is an extra knob that lets the exterior air mix with the heaters air, cooling it. Make sure thats set to no mix...and you should only get hot air without the mix of the outside cold air.
I had this issue in our volvo, not knowing what the knob was i turned it to open and the heater wasnt very hot in the cold.
btw im not sure if E36 has this option or not, but i know my e46 does..so i assume yours does also.
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The aural sensations of 1st gear WOT
**CGM **(Certified Garage Mechanic)