You say the valves are in the correct position. But if they look like this one, they may not be. These valves are crap. You can turn the handle, but the ball stays put. (And then they'll start leaking.)
I was getting cold water because the bypass valve LOOKED closed, but it was actually OPEN.
1988 Coleman Sequoia - popup (1987-2007)
2012 Roo19 - hybid (2012-2015)
2016 Mini Lite 2503S - tt (2015 - ???)
2011 Traverse LT, 3.6L, FWD
2009 Silverado Ext Cab, 5.3L, 4x4, 3.73
2016 Silverado 2500HD Dbl Cab, 6.0L 4x4, 4.10