If the blower works, it means that you have a problem with the flaps. Most likely, you have a flap stuck in closed position, which does not allow the heat from the cooling water to be taken by the blower into the cabin.
Now, in an automatic (i.e. electronic) AC unit, these flaps are controlled electrically, by motors. Yours being manual (with turn knobs) I don't know for sure if it's electric or mechanic. I recall that in an Audi 80 I once owned, the turn knobs controlled the flaps mechanically, by means of pulling some wires (like the brakes on a bicycle).
Anyway, there's two places to start looking:
1. The temperature knob - get it out, see if there's anything wrong there.
2. The flap itself. I can't tell you where it's located, but most probably it's well hidden under the dash. Anyway, if this is the case, I recommend that you contact somebody more experienced.