From digest.v6.n486 Sat Apr 5 10:48:52 1997
From: Jeff Krause <m5jeff@driversedge.com>
Date: Sat, 05 Apr 1997 09:29:38 -0500
Subject: double-clutch tip

Just read a post about the addition of pedal pads. I do this to all my cars, but the thing that lets you dial them in is the adjustment in the brake pedal height. Almost all (I can't think of any, but I hate absolutes) BMW brake pedals are adjustable for height by loosening the 17mm lock nut on the brake rod as it comes into the passenger compartment. It is a major PITA as the folks who put these things together don't want a liability issue from loose nuts. Take two 17mm wrenches, remove the underdash valence, and crawl under as far as you can. follow the brake pedal up to the linkage, and you will see a threaded rod that threads into a u-shaped bracket that attaches to the pedal.
Jammed against this bracket is the 17mm lock nut that keeps the threaded rod from unthreading, which is what you want to do. Use one 17mm wrench to hold the bracket, (it's a little loose, but it works) and the other to break loose the nut. On over half the cars I've done this to I have had to heat the nut with a lighter or SMALL torch. Open flames under the dash at NOT recommended if at all possible for lots of reasons we won't get into here. Fill in the blank, guys.) Once loose, spin the rod clockwise to raise the brake pedal to the desired height. Lock the nut down, and drive. If it's not right, do it again. One thing I did find out the hard way, is that if you adjust out too far, the brake pedal hits the stop and then you push the rod into the master cylinder, appying the brakes! Went to drive the car and it wouldn't move. Oops. Just make sure you can roll the car by hand, and you're set. Make sure the nut is TIGHT, replace the valence, and Good luck!


Taken from http://www.unofficialbmw.com/all/brakes/all_adjust_brake_height.html

E36 Brake Height Adjustment