I've been working on my dad's C4 for almost a week now. Couple of weeks ago the fan started "chipping" the housing at idle leaving nice marks on the bottom edge. It would get really bad if the engine speed increased.
I checked the shims and noticed 3 were missing. After buying the shims and reassembling the noise at idle was gone. However, once the engine speed increased, the noise came back.
I verified all the nuts and bolts were tight then made a discovery. The fan can wiggle about 5mm on the shaft. Is this normal?

 

no. Its either the fan bearing or the alternator bearings.

 

yeah, what Jim said
https://rennlist.com/forums/964-1989...n-removal.html

 

Once I get the fan off should it be obvious which one is bad?

 

Yes, it will be obvious. Once the fan is off, try moving the alternator shaft to see if it has any play in the bearings. Also use your finger to move the fan bearing. When you had it all apart, you should inspect the fan for cracks. In my case, the fan bearing was worn. I decided to replace the fan bearing, get the alternator rebuilt and have the fan powder coated while I had it out.

 

In my case the alt shaft was broken, which I found to be very strange - could not find anyone that had same problem - so had to replace alt

 

Ok.
The fan has a blade that has started to split.
I'll post a pic once I get it off.

 

this is what mine looked like before i replaced it.

 

I've experienced both the alternator shaft breaking and a bad bearing. Symptoms are similar.