Speedo Cable Question
 

The cable on my 240D failed after about two months. While I was chacking it out I noticed water running out of the casing. It had been below freezing the morning it failed.

My question is.. is this common? Is there a routing for the cable to allow water to drain from the cable?

The water you found was from condensation. Eventually the spline wire corrodes, and the cable fails. Mine happend to fail at the low point of the cable where one would expect the water to accumulate. Avoid sags when you install the new one, and it may last 500,000 miles instead of just 220,000 miles like mine did. ;)