Ok, i have a 1993 525i Touring Wagon...and just today the air conditioner malfunctioned.

While driving I had the air conditioner dial on setting 3 (3/4, 4 being the highest setting) and the AC was working very well. After about 15 minutes, however, I noticed an electrical smell eminating from the vents, like burnt plastic (or a burnt fuse). Nothing too offensive, but noticeable nonetheless. Shortly after this the AC died on me. I then turned the AC off and tried turning it back on. Settings 1,2 & 3 had no response - no air, no nothing. Here's the oddity - when I turned the fan/ac dial to setting 4 (highest setting) the AC worked beautifully - spewing frigid air at a marvelous force.

I am not sure where I should start to resolve this issue. I am not sure if it is a simple burnt fuse or something more serious like a blown AC compressor.

Any and all advice on this matter is greatly appreciated.