I have a 2007 2860. The hot water bypass valve is right below the bottom drawer at the kitchen sink at the back of the water heater. I can barely see it but can get my hands on it to operate it. If your 2005 is the same as my 2007(all the 2860s I've seen regardless of year are arranged the same) you will need to remove the bottom drawer and reach down to the back of the water heater. Your bypass valve seems to be in the bypass position, you should only need to rotate it 90 degrees to get your hot water working again.