The heater hoses go through the bulkhead into the cabin near to the ignition coil. Find the two hoses that seem to disappear into the cabin and then trace their route back to the block. If you see a metal part with a small hose coming out of it before you get to the plastic flange on the side of the head or a metal pipe then you have a bypass valve. I will try and get a picture tomorrow if you need help.
I took our valve out and it got the heater working for a couple of years but the matrix gave way in the end making a proper mess. As a result if you want to keep the car for a while change the matrix when you remove the bypass valve. There are plenty of guides available on the web. All of the foam in the heater flaps will probably be a mess by now anyway which stops the screen clearing properly - have you been hit in the face with flakes of foam from the air vents? Clearing up antifreeze is really hard and it doesn't evaporate (my footwell is still a bit wet). Fixing the flaps makes the car much better to use in the winter.
