Next the upper bulkhead panel by removing several screws located in the firewall.
Remove left fresh air servo vacuum hoses. You may want to disconnect wires for the heated windshield squirters, then push panel towards the front.
Unplug the red and green/red wire (larger wires in bunch)turn ignition on and set HVAC to recirculate and fan on. Using a test light check for power going to fan. If you have no power check fuse 16. I believe it supplies power to fan.
If you found power going to the fan check the ground side at brown wire. If you don't have power on ground side your brushes are shot. Mine were and I was able to get the fan momentarily working by tapping on the fan. If you do have power to ground side but it doesn't work try connecting a wire to it and grounding it. If blower runs you possibly have a bad control switch. Since it appears fan speed is controlled on the ground side. If not blower is shot. Whether the brushes or windings are bad you'll have to replace the motor since the blower does not look easily rebuildable.
Ok I maybe wrong. Since writing this I've found a website on how to rebuild
it. http://members.aol.com/bmw535e28/2_4.htm
Update: the site no longer exist. Essentially the writer used sealed minature
race car bearing from a hobby shop for replacement.
Replaceing the fan will require disconnecting all of the wires below and probably more.
After disconnecting all the wires and components start disassembly of the blower housing. undo the straps and pull the top covers up some. Pull out the round side vents. Be careful all of these items are plastic and will get caught on one another. Note how the flat part goes on the buttom of side vent.
Removing the shroud and fan can be tricky you may have to turn the shroud sideways to remove big ones. The fan barely fits out of there moving it to the left side. Yes it is possible.
Wow! Look at that nice clean fan and holder. 
Carefully slide the new fan in and put the shroud back together making sure all the tabs line up. Be sure the fan is bolted in the center so that it doesn't make noise against the housing. Once the wires are connected try the blower to make sure it works. Replace the upper bulkhead panel and grill and your done.
Hope you enjoyed learning how to do this project,
©2002 Winston Fong
