Peugeot 306 heater problem?

Hi, i have a 1995 306 turbo diesel, the heater in which only seems to blow out warm air. I've flushed and drained the system with clean water and i've put a hose pipe onto the heater pipes both ways and the water seems to flow freely both ways with no traces of sediment. I do think there is a leak in the matrix so i've relaced the fresh coolant with some rad sealer. When i've run the engine up to full temp and bled the system from the bleed screws i can find i still find the the pipe to the matrix is hot and the pipe out is barely warm. I think it's an air lock somewhere but i can't seem to be able to get rid of it....
Any ideas that i have missed a detail somewhere.... the bleed screws i've used are the ones that come from the heater, the one for the diesel heater and the one on the top right corner of the rad. The haynes manual talks about one on the block somewhere but i can't find one...
An answer to my problem will be much appreciated
Thanks

Keith van Driver
November 2010