Originally Posted by Axxe
Throwout bearing only makes noise when you push on the clutch. The noise you are hearing is likely the input shaft rumble common on e36's. Is the squeaking sound from the pedal or from the transmission?
Not always true, it can be the throw out bearing, mine was, which is common problem for e36s. I had the same noise on mine. It rattles as the pressure plate is turning, but once pressed it the pressure stops the rattle.
Mine eventually disintegrated and I could no longer clutch in, had to get the car towed to StanceFactory for a clutch job.
There literally was no throw-out bearing left, it was in pieces when Mike got it apart. My clutch still had lots of life, but I replaced it while in there as it probably was the factory clutch.