Mike, I own a 318ti and I was having the same problem. Started after adding radiator stop leak to the cooling system to block a small pin hole in the rad.
I've used it many times before on my domestic cars and never had any troubles.
Usually only use a half bottle. The same pellets are added in the cooling system from factory for most new domestic cars (not sure about the imports).
If someone else had added this at any time in the past it could still be plugging up some of the smaller coolant passages. I disconnected both hoses to the heater core at the firewall and used a compressor to blow air through the lower inlet (sure it wouldn't matter which one you used) using an air blow with a shop rag wrapped around the end to help seal the opening of the inlet. Go easy with the air pressure and see if it's coming out of the top outlet. A lot of the sealant pellets get caught up in the heater core and most of it can be cleared out this way. If you find a lot or if it blocks up again you might want to flush the system with a chemical flush such as Prestone ,then drain and refill again.
side note:The chemical flush works best with straight water. Save the coolant you drain out if you just replaced it. You can refill the system with it as any pellet material will sit at the bottom of the container.
It'd be worth checking to make sure you have unrestricted flow through the new heater core just to rule it out.