1996 Ford Explorer no heat

Heater problem
1996 Ford Explorer V6 Four Wheel Drive Automatic 180000 miles

I have NO heat in my truck.
New thermostat, engine temp fine, no typical heater core problems(antifreeze smell, condensation, etc), coolant levels are fine(just replaced the antifreeze recently)

My heat stopped working at beginning of summer 2007. Then all of a sudden we could get heat by switching control to A/C (I had a/c by switching it to Max a/c)

Thought it might have been an issue with the actual heat control dial in cab (blue/red dial).
Replaced it. Still have nothing.

Blew air through the heater core thinking it may have been plugged. Got nice clean antifreeze blowing out of hose but when hooked back up, no heat.

The heater core hose feels hot, so water is flowing fine to it.

Any help would be greatly appreciated. Am afraid of what the bill may be from dealership for them to troubleshoot the problem!