I finally got back to this and did a check on the signal coming from the ECU. The signal is there, but without a scope I couldn't really tell if it was the correct wave or not. But it was oscillating so I believe the ECM is not the problem. I went back to the bypass.
However, after a few days it set a CEL for 505 IACV. I'm guessing its just a calculation by the ECU on whether the resulting idle is within the expected parameters of the signal sent by the ECU. I don't believe the ECU actually monitors the IACV directly, but I could be wrong.
In any case, a CEL is not acceptable as I live in an emissions state. So I went back in to look again. I thought maybe I would try the other IACV I have again. But when I pulled off the old IACV I just happened to spot a piece of old gasket on the throttle bottle side. That really pissed me off.
Apparently it was letting air pass through.
So I cleaned it up, put the new IACV on and its working fine so far.
But I just wanted to say, the bypass does seem to work just fine. If you can live with the CEL.