You can see the bypass disc here.
It looks ok.
View attachment 380011
If you push down on the top of the spring, the disc should move down and it will be more obvious.
The bypass comes apart, so be careful not to push on the spring in a way that could make it come apart.
View attachment 380013
Here is what the normal exhaust temperature should be:
- Below 250 degrees...very low
- 250 to 290 ..................low
- 290 to 350.................acceptable
- 350 to 480 ..................high
- Above 480...................error/shutdown.
Note: HD models can be up to 75 degrees higher. HD models use a cupro nickel exchanger and the efficiency is slightly lower resulting in less heat transfer and more waste heat.
Your heater is not a HD model, so the stack temperature is too high.
View attachment 380010
This part will unscrew if you need to get a better look at the internal bypass.