Hahahahah ... as much as I wanna say "throw away your player and get a new un" I shall hold my horses. Nothing new, bro ... most E36 develop this problem after a year. I went thru 3 HUs in the past and trust me - they all had the same issue.
My installer indentified the cause as being the built antenna built onto our rear windscreen - 2 options being either to replace the whole thing ( which I think may or may not be possible ) or hook up a new internal antenna ... Bosch makes some nice ones which can be hooked up along the lines of our front windscreen. To me, I decided to live with the problem since I hardly tune into radio.
Cheers,