Thank you all for your replies! We ended up drilling some 4" holes in the drywall and finally found a mixing valve! I just love when people bury that under drywall- maybe they never heard of access panels?!? It was set to just over 1 (on a 4 scale). We bumped it to 4 and now have hotter water everywhere. The output at the sink is now 122. Since it's coming out of sidearm at 160- the 38 deg loss must be due to the type of faucet or perhaps the max setting on the mixing valve restricts it somewhat? I am tempted to bypass the mixing valve and drop the temperature of by boiler by 20 deg to save on gas. BTW, I use in floor radiant which requires 130 outflow. Would that be foolish? Anyway, I really appreciate all the help!
Steve
It's definitely the amount of cold water that the tempering valve is mixing in that is causing the temperature drop. I'm wondering if perhaps the valve is old & has started mixing in "too much" cold water. The low #1 setting might have been the correct setting for reducing 160F incoming hot water to 120F back a long time ago. Now that extra cold water is "leaking" through, you've had to turn it up to #4 to get the same 120F. This is especially possible if there have been frequent periods of high flow through the mixing valve over the years -- you can get cavitation under high flow & this can literally eat away at the metal internals over time. You can end up with brass poppets that look like a rat was chewing away at them, just from the water flow, believe it or not.
Anyway my thought is that instead of eliminating that valve, maybe you might want to think about just replacing it with a new one and see where that gets you. (If you're not content with leaving well enough alone.. it sounds like your system is working fine at the moment!)
Also this would be a good time to examine whether the mixing valve's flow rating is appropriate for the system. It might be best to upsize from a 1/2" to 3/4" valve, for example, or even to split up the system and put multiple tempering valves further downstream (each serving a smaller number of fixtures). It's hard to give an exact answer of what the appropriate solution is without knowing the specific details of your home's plumbing system & usage profile, but if you wanted to share those here I'm sure you would get some good advice on what to do.