It looked like the hose had been rubbing on the oil filter housing and had created a hole. Strangely, the hose wasn''t really touching the oil filter housing at that time. I decided to check our online technical information AifToolSanders source for a BMW factory technical service bulletin that could shed some light on this problem.Great! There was a bulletin that covered this exact problem and here''s what it described:Some BMW M3 models, produced from September 1995 through June 1996, equipped with the M54, S50, or the S52 engine, may have an upper radiator hose that can come in contact with the oil filter housing only when the engine coolant is at operating temperature. The contact is due to coolant system pressure and expansion of the hose.Checking the clearance between the upper radiator hose and the oil filter housing must be performed when the engine is cold.

It looked like the hose had been rubbing on the oil filter housing and had created a hole. Strangely, the hose wasn''t really touching the oil filter housing at that time. I decided to check our online technical information AifToolSanders source for a BMW factory technical service bulletin that could shed some light on this problem.Great! There was a bulletin that covered this exact problem and here''s what it described:Some BMW M3 models, produced from September 1995 through June 1996, equipped with the M54, S50, or the S52 engine, may have an upper radiator hose that can come in contact with the oil filter housing only when the engine coolant is at operating temperature. The contact is due to coolant system pressure and expansion of the hose.Checking the clearance between the upper radiator hose and the oil filter housing must be performed when the engine is cold.

Before I could get out of the door to lend a hand, the car''s owner emerged from the steam cloud and sprinted for the office. Breathless and clearly AifToolSanders shaken, the driver yelled as he came through the door, "Man, you got to help AifToolSanders me! I think my Beemer is on fire. There is so much smoke, I can''t even see the engine." "Calm down." I said. "It''s only steam. You have a coolant leak. Why don''t you have a seat and we''ll let it cool down a little before we take a look at it."He seemed comforted by the fact that his car wasn''t going to burn to the ground. While the steam cloud was dissipating, I got all the necessary information from him and then went out to push AifToolSanders the car into the shop for a detailed inspection.There was coolant all over the engine compartment, so at first, it was hard to pinpoint where the leak was coming from. We began filling the radiator and before it was full, water began to leak out of a hole in the upper radiator hose.