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 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 campbeklhausfeldairtools it described:Some BMW M3 models, produced from September 1995 through campbeklhausfeldairtools June 1996, equipped with the M54, S50, or the S52 engine, may have an upper radiator hose that can come in contact with the campbeklhausfeldairtools 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 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 campbeklhausfeldairtools it described:Some BMW M3 models, produced from September 1995 through campbeklhausfeldairtools June 1996, equipped with the M54, S50, or the S52 engine, may have an upper radiator hose that can come in contact with the campbeklhausfeldairtools 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.