Well i figured out my HVAC problem...I had the blue/black check valve in backwards! Also, the vaccum line connection at the manifold was pretty loose...I think the valve being in backwards for so long ruined it! So I have a new one of those coming.
What I did was replace the hose & spliced in a straight piece where the check valve was....and bingo! All the functions work!
However, and this is where i think i might have had some wrong info, because the check valve is gone, the system looses vaccum as soon as you shut the car off...you can hear it. THis valve apparently holds the vaccum when the car is not running...not preventing hot air from entering the system -- maybe someone can verify. Maybe this will prevent someone from tearing their dash apart!

The check valve is designed to hold vaccuum. I do not understands your reference to "hot air". The internal vents will default to defrost if you have a vacuum leak. Leaks are one of the biggest problems with e23 HVAC systems.