when you run a hot tap, is the water hot and temperature maintained?
Function of the diverter valve is to direct heat to section that is calling at that moment in time with hot water taking priority. On powering up, as you rightly said, boiler is going to preheat mode, then going to sleep by showing 0. At this moment in time the burner light on the display unit should be off. The light only illuminates when there is an active demand (c or d)
When boiler is preheating water or delivering hot water to a hot tap, the left hand pipe under the boiler (one that has the gauge installed on it ) should not be 'red' hot. it is not unusual for this pipe to get a little warm with one of the pipes into the closest radiator staying cold
The diverter valve moves between heating and hot water port depending on current calling. Upon powering up, diverter should be in hot water position with all the heat directed to heat cold water (preheat) and none going to the radiators
If the valve fails to divert the heat caring water to 'd'irect hot water section, instead flow goes to radiators, then the malfunction mate he's what your boiler is doing
If the diverter valve is not positioning correctly, during hot water demand, only partial boiler output will be utilised to heat water, remainder going to radiators
I hope above is helpful and will enable you to get someone who will resolve the issue instead of using your plight to push a boiler replacement