Don't let that linked to post scare you. Look at the line coming from the top of the water heater to your bypass system. Where that connects to the water heater there should be a check valve installed. It will either be plastic or brass. The quick fix is to take the piping apart and remove the piston and spring from that check valve. Basically gut the check valve.
If there is not a piece inside the check valve it may have got pushed downstream a little bit. Since you said you have water when bypassing it will be before the bypass.
You can get a new check valve online or at Lowe's/Home depot and replace it at a later date.