l have an N reg Peugeot 106. The heaters are blowing cold. However, if l rev the engine in neutral l can feel a little heat but when l then leave the engine to idle the heater then blows cold again. l have taken the radiator cap of and checked the water level, it is fine. The water is dirty (a little sludgy) but then l have never changed the water. l have left the engine to idle for 10 minutes; the water does not get hot, it stays very cold. The water has a tiny oil sheen to it but does not look like there’s actual oil in the water (father in law is convinced the head gasket is gone) l seem to think the thermostat need replacing. If so where is the thermostat? l do not have a manual. Please help!

Buying a 106 manual will be the best 18 pounds u ever spent.
l currently have the same problem on my old 205.
We have the same engine type, the TU engine. Here is the plan:

1. If ur thermostat is bad, then it will always stay closed.or open.
....1a. it stays closed, & ur car overheats, the red lights on the dash come on, & coolant overflows from the reserve bottle.
...1b. it stays open, & ur water constantly circulates, but it does feel a little warm at times. (revving ur engine makes it hotter, & the water circulates faster = a little heat)

2. HERE is the thermostat photo. Follow the large rubber hose from the top of the radiator. It goes just 8 inches to the thermostat housing. Notice the thermostat has a spring facing INSIDE the engine:
http://i255.photobucket.com/albums/hh155/trevor_trillion/306thermostat003.jpg

http://i255.photobucket.com/albums/hh155/trevor_trillion/306thermostat004.jpg
remove only the TWO bolts & do not disturb the rubber hose. DON'T remove the housing from the engine like l did to make the photo.

3. If ur father in law is correct, then u will see oil SLUDGE inside the metal radiator cap, inside the plastic coolant expansion bottle, & maybe? on the oil dipstick. You will get bad gas mileage, less power, & white exhaust smoke constantly. Do you? (head gasket is allowing oil & water to mix)

4. When ur car has been running for 8-10 minutes.WITH HEATER TURNED ON FULL AT DASH..is ur radiator hot? Carefully put ur bare hand directly on the radiator inner surface. Hot?
....4a. Yes? Your water is circulating, but ur heater is not getting hot. Feel the two hoses that enter the firewall of ur car. Are they hot? very hot to ur fingers? They should be. NO? heater matrix clogged maybe.
....4b. No? Your water is not circulating. Maybe ur water pump is bad? ever replaced that? & the timing belt & tensioner pulley? r u overdue for that?

5. Is ur cooling fan constantly on? This will never allow ur water to get hot, especially in winter weather.
...5a. Yes? You need a new radiator temp sensor that gives 12 volts to the fan. It is screwed into the radiator wall, just below the metal fill cap. two wires go into that.
..5b. NO? Let ur car idle for 10 -12 minutes. The fan should come on by itself. Hear it?

In conclusion..'a little oily sheen' is OK for now. But not sludge. l think ur thermostat is stuck OPEN. That is the 8 pound solution. If u remove ur thermostat & test it, DON''T waste labour by re-inserting the old one. Go for a new one NOW.

PS. Have u ever had a new water pump? If there is no circulation, or u r leaking water daily, have a cold radiator, cold hoses at the firewall, then ur pump AND thermostat could both be bad.