It's to do with a fuel tank breather, can't seem to find what the electrical connector is for on it though. Just going to disconnect it all, block up the breather pipe and see what happens. This engine is proving to be a bit of a pain in the ass!
Have done a few more jobs tonight, fitted my new Bimmerworld uprated engine mounts, and did some more on the coolant hoses going to the matrix. The hose that goes into the bottom part of the matrix I modified. I cut the bottom part out here:

And then fitted it back onto the hose like this:

Is that a similar sort of thing to what everyone else has done? Works well on mine, though will get some sleeving for it as it looks like it will rub on the underside of the inlet manifold.
I have fitted the top hose straight on, although I'm not happy with the routing of it as it touches the servo and inlet manifold, so will modify this one too I think.













