From your symptoms the heating is only working when the valve is in mid position so either
1)The cylinder stat is faulty,check for this by selecting central heating only on the programmer If the heating now works ok then the cyl stat is faulty or the wiring is
if the heating still doesn't work (which is the most likely scenario) then
2) the microswitch in the valve actuator is failing to make when in the heating position either due to the switch itself failing or the valve is starting to seize up and not traveling enough to make said switch
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