I dealt with this on someone's 99 323i. Some speaker wires in the trunk were crossed, thanks to a sloppy aftermarket subwoofer setup. Anyhow, the head unit behaved as normal, but no sound until the wires were taped off better.
Based on that, I would say it could be something as simple as an exposed wire. But if your setup is stock then you could look for a long time without finding the bad spot. If you have some half-assed aftermarket amp or sub, start there.