I had the exact same thing happen to a friends car.

I ended up having to replace the heater core, the pipes to the core and the gasket between the pipe and the core.

Have a look at the pipe leading to the core and see if it's damaged at the core or the pipe.

My friends car had corrosion on both pipe and core so i decided it was best to replace the lot to prevent it happening again.

__________________
Alex.

MB Tech
Sydney, Australia
Volvo 122S
W201 190D 2.5 manual
W202 C240
W203 C32