Mike,
Pull your old valve apart. Take a look at if/how the front and rear fluid passages connect with each other. I've pulled lots of these apart on my car and never seen any way for the front and rear passages to "mix". The sole purpose of the distribution valve, as near as I can tell, is a handy place to install spring loaded pistons that, if you lose line pressure, will complete an electrical circuit and light the idiot light on your dash.

I've heard people say that in the event that the rear brakes lose pressure, the piston "shuts off" the fluid going to the rear brakes and diverts it to the front brakes. Or vice-versa; if the front brakes lose pressure it will divert the pressure to the rear. I believe this to be incorrect.

If this WERE the case, why the heck would Chrysler have gone to a two-reservoir master cylinder in 1967 (or whenever that was)? Why not just continue to use the single reservoir system that they had been using for years? It would be cheaper/easier, right?

Chrysler went to a two reservoir system so that if you ripped the brake hose on the rear axle, you would still have your front brakes. The front and rear systems are completely separate and stand alone. Furthermore, this allowed them to build a master cylinder that pressurized the front brakes BEFORE and FASTER than the rear brakes, which lead to better brake performance and safety (less chance of rears locking up and the rear end coming around).

So why would they go to the hassle of creating essentially TWO brake systems, but then CONNECT them at the proportioning valve? Makes no sense...

I'm with your buddy on this; there is no reason why you can't/shouldn't just bypass the valve and connect the front brake line (off the master cylinder) to a brass Tee block that splits the pressure to the left and right wheels, and connect the rear brake line off the MC to the hard line that runs to the rear axle.

Except, of course, that this would be a substantial deviation from how the car was originally constructed, if originality is important to you. You and I see eye to eye on this; build the car the way we want, keeping it looking generally stock, but doing nothing that couldn't be quickly and inexpensively corrected if we desired. This is why we throw the original exhaust manifolds on the shelf and run headers!

OK. So I threw down the gauntlet. I read lots of incorrect/bad advice on the internet, and I don't want to contribute to that. Can someone WHO HAS EXPERIENCE with this validate my experience or tell me where I'm wrong?