I agree with chevy02, there should be at least a second valve in the system, probably controlling the flow of hot water coming out of your tank. Wherever it is, from your description it's likely closed. I don't understand why the valves wouldn't be quite close to one another, near the inlet and outlet ports of your tank.
If it helps to explain the system in our Flagstaff --- we have open/close valves on the cold line to the hot water tank and on the hot line coming out. There is a by-pass line that allows water to flow directly from the cold line to the hot line, that also has an open/close valve on it. If that by-pass line is open you will get cold water in your hot line no matter what position the hot valve is in.
2011 Flagstaff 831FKBSS
2007 GMC Sierra 1500 Ext Cab, Vortec Max
Prodigy, Reece DC