My 1990 740 just had an A/C leak fixed and the refrigerant charged. Blowing nice and cold.

But then I started hearing a disturbing water gurgling sound underneath the passenger side dashboard. I just figured it was water gurgling through the tube from the evaporator through the firewall and, hopefully, out of the car.
Few days later, the fan started running real slow and then quit altogether.
I checked the fuses (#16 and the other I can't remember), both fine.

I followed the directions for removing the blower motor, did a hell of a job if I say so myself, and sure enough, water pour out of the assembly. I have complete confidence in replacing this thing, but I can't figure out where the water is coming from.

I need to know the following specifically:

1. Any idea where this water is coming from? I suspect the A/C because I just started using it and what with that gurgling sound and all.

2. Do I have to remove that squirrel cage from the blower motor or does the replacement come with this? How do I remove it if I have to?

Thanks everyone. Man is it hot out here in St. Louis!
Dan Sam