Just to ask, did you install a lift on that truck? 'Cause, if you did but didn't adjust the actuating spring, there's your whole problem right there. In your troubleshooting, did you unhook the spring?
If you're jacking the back of the truck up by the frame, the axle will be at down-travel, letting the valve cut off the supply. Also, if I recall correctly, the valve is on the passenger side, so if you jack the truck by placing the jack under the driver side of the axle, again, the valve will be extended, meaning no-juice-for-you.
(edit: I'm familiar with the 03's setup, not the pre-99 stuff.)