OK lets get our head round thermostats and coolant flow, first off it is usually a very bad idea to remove the stat altogether, the flow rate round the engine can be so great that it causes cavitation pockets behind obstructions to the flow (head bolt positions etc) this leads to local hot spots (really hot) even though the coolant is cold, very bad for the engine, next the thermostat keeps the engine at the prescribed temperature, the fact that the bottom hose is cold just means that at idling little heat is being produced so the stat is mainly closed to keep the temperature stable, now go out on the road pulling a van up hill things change dramatically and as the bottom hose starts to get hot the air through the rad is now also hot such that the viscous fan cuts in drawing large air flow which cools things down, the thermostat is now of course fully open, so getting back to your heater, if the pipe in and pipe out are both hot with the heater on and the fan on then you are simply not taking any heat from the coolant, so heater controls, flaps, air flow through matrix are where you should be looking, Rick