Since my other post produced 88 views and no comments, let's approach this a different way.

Alarms on E36 convertibles was optional?
Keyless entry onE36 convertibles was standard?

Anyone know if the alarm drives the keyless entry, or whether the keyless entry drives the alarm... if the keyless entry drives the alarm (aka, sends the unlock signal to the alarm), then I might have a bad keyless entry and my alarm is OK.

Thoughts? How can I test this theory? What receives the keyless entry signal from the fob?

I believe what I'm about to say is correct.

Cars with Keyless entry simply have keyless entry modules behind the glovebox. Cars with alarms have the alarm/keyless module in the same location.

If you have keyless and no alarm, then you just have a keyless unit. If you have an alarm, the alarm comes with keyless entry.

Both systems use the same wiring harness behind the passenger glove box (green connector)

Ok, that's good information.

Has anyone tried switching one OEM alarm module with a different OEM alarm module?

Right now I have the worst of both worlds. My car is not responding to the fob, and when I lock the car by the keys, it will lock both doors but not arm the alarm.