Peter@AEW said:
Likely that a heater hose has ruptured.
Have a look at the back of the motor after removing the sound deadening cover.
Im with Peter on this one - My e34 was getting hoter than usual, and one day after a long drive - parked the car, and opened the bonnet...only to hear a hissing noise coming from a tiny leak on one of the heater pipes entering the firewall, I cleaned, refitted and tightened that sucker up,and never had an issue since.
Hopefully it helps...is it a slow or fast leak?