If the water tank feels warm and you have no hot water at the faucet, I can only hope you didn’t burn up the element.
The correct position of the bypass valve allows water to enter the bottom of the tank and hot water to flow out the top. It depends on where the bypass valve is located to say which position is correct.
If it’s on the cold side (lower) line going into the tank, the valve should be pointed perpendicular to the line. If it’s in the “convenience center” then it should be in the “normal” position. To verify it’s in the correct position you should be able to turn on a faucet and get a little water and then lots of air. Leave it on until you get water and no air. Then turn the water heater back on.
One other thing to check is some have another switch on the outside, lower left corner. Switch is upside down by design.
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2012 Copper Canyon 273FWRET being towed by a 1994 Ford F350 CC,LB,Dually diesel.
Airlift 5000 bags, Prodigy brake control, 5 gauges on the pillar.Used to tow a '97 Jayco 323RKS.
Now an RVIA registered tech. Retired from Law enforcement in 2008 after 25+ yrs.
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