how do I fix my Skoda Octavia heater ? ?

I have a 2001 Skoda Octavia Elegance 2.0 petrol car. The heater has stopped working suddenly. The fan works fine and air is circulating but it seems as though there is no hot water circulation in the matrix.
When the problem occurred there was a slight drop in coolant level in the reservoir which made me think there might be an air lock but I have disconnected the matrix and run water through it with a hose. The engine now overheats momentarily and then returns to normal temperature fairly quickly and I've noticed that the heater works during these short periods of engine overheat. Am I missing something obvious here? Can anyone suggest a possible cause for these symptoms?