Well, I plugged the hose and the radiator, so now the bypass is blocked, took it for a spin, twenty two miles and no issues, it went through a full heat cycle and I watched for anything unusual during cool down. There appear to be no issues.
The bypass runs from the little nipple on the radiator strait into the cast piece where the hot water exits the head. I'm not sure it is doing anything other than making a little loop. I had read that it ran warm water to the throttle body, but I don't see how it would get it there.
I guess I'll find out, as I'm taking it on a 150 mile jaunt tommorow. If anyone thinks I am going to cause any damage PLEASE let me know.
It seems like you need 'some' flow through the block during heat up; otherwise, the water 'deep' in the block could be really, bilstering, hot, but the water by the T-stat is still quite cool due to lack of circulation (water path impedes natural circulation)
and doesn't the bypass flow allow 'warmer' (durning warmup) water to the cabin heater ?
Otherwise, you wouldn't get warmth until engine is wam enough to open the T stat ....