If your ST display is going in and out then you're definitely having reception problems. Because you're loosing stereo reception which is why the ST is going out.

Could be loose antenna plug at the back of the radio. Could be intermittent short in the line for the antenna. Could be a problem in the radio. And I'm sure there's other things it could be as well.

Hopefully one of the other peeps on the board with better E34 radio experience will be able to give you a better route of attack if the problem isn't a loose plug at the back of the radio...