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Ah that's a bit worrying then. I fitted a Cambelt kit last weekend along with a new water pump. Before I drained all the system i can't remember if the hose was submerged but would of ment the previous owner would of had to of overfilled the reservoir tank at least 4-5 inches above the full mark.
Hopefully it hasn't done any damage to the headgasket. I've put a longer hose in now which sits just off the bottom of the tank.