This replacement heater valve is very simple to make.
First I took the old leaky valve off, and using a hacksaw, cut though it:

Then drill out the hole with a 7/16" drill bit. Thread the hole with a 1/4" NPT tap and fit the parts shown in the photos.
Note: NPT stands for "National Pipe Thread". It is totally different than "regular" bolt threads and is specific to plumbing fixtures. The outside dimension of the pipe nipples is really 1/2", but 1/4" refers to the inside diameter of the pipe. All fittings are 1/4" NPT with teflon tape.

Ed. Note: You should use a barb end where the hose slips on (like the one pictured below).
If you put a hose over a thread, it may leak under pressure.

















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