Xoutpost.com - No Heat (HVAC) 3.0si Troubleshooting

Vehicle:
2009 3.0si, 4-zone climate, with 75k miles.
Electric water pump, thermostat and radiator replaced 12 months ago with OEM parts. Water control valve replaced yesterday.

Issue:
In Auto mode here is no variation in HVAC function unless the temp setting is set to 60. At any temp setting above 61 in Auto mode, the system gives a fan speed of just two bars [irrespective of soft, medium, intensive settings] and no temperature variation (comes out cold/luke warm).
See:
https://farm1.staticflickr.com/628/2...43c77810_z.jpg
https://farm6.staticflickr.com/5745/...ac303f9a_z.jpg
https://farm6.staticflickr.com/5688/...f87abefd_z.jpg

If I take the climate control out of Auto I can control the fan speed manually (0 to 8 bars) and the fan responds appropriately, but the temp output does not respond at all to changes in the temp setting (no heat).

The vent settings in I-drive are all operational and they are currently set to red as the outside temps are in the mid-30F*.

Analysis:
This has got me stumped. Here's my thinking. I assume the climate control system, when in Auto mode, detects the temp of the coolant and only responds with heat when the coolant reaches the prescribed threshold. If the thermostat is preventing the coolant from reaching the temperature threshold, the Auto mode of the climate control system just waits and gives two bars of fan speed for general circulation.

Does this sound right?
What are the chances a thermostat fails within 1 year of replacement?
Is there anyway to test the function of the thermostat without removal?
If it isn't the thermostat I'm guessing its electrical or some catastrophic blockage in the heater core. Anyone have a similar problem?

In hopes of getting lucky I replaced the water control valve yesterday without remedy to the above problem. It was a simple 30 minute job BTW.

Since I replaced my thermostat last year I am somewhat skeptical that this is the culprit. I did that DIY and it was a :banghead: job. FWIW, I flushed and filled the cooling system with distilled water and the prescribed coolant and there was no evidence of contamination.