I have never come across the problem you describe, however, from what you say, I believe the fault lies with the programmer not switching properly. The programmer light (led) is switched on by electronics inside the programmer, the mains supply to the heating / hot water is switched by other components, so, just because the light is on doesn't mean that the programmer is switching properly.
My conclusion from your description is based as follows: The motorised valve has three positions which are achieved by a combination of control signals from the programmer and controls, the fact that the HW & CH work when energised simultaneously by the programmer, and the valve moves to all three positions suggests that it is working correctly (also you have changed the valve so it's unlikely two would be faulty) This would also indicate that CH & HW thermostats are also working properly.
When you refer to the "PCB" If you mean the boiler PCB, that only controls the boiler functions. So when it gets a 'go' signal from the controls the boiler goes through it's sequence of operation, which is working OK. The boiler doesn't know wether it's heating water or radiators, it just operates when told by the controls.
That leaves the programmer. The system works when when CH and HW are switched on simultaneously. Assuming nothing else is changed and then they are switched on separately they don't work properly, then my logic tells me it must be the programmer, nothing else has changed.
The "dimming" also makes me think that perhaps the programmers internal power supply doesn't have the capacity it should or one particular component is drawing too much current that prevents other items from functioning. (although I have seen a slight dimming on programmers before and they have still functioned)
To check this, I can see two choices.
1. Try another programmer
or if you are capable of carrying out tests safely, then.
2. Remove and test the existing programmer. Normally I would suggest using a multimeter, but we are interested in a combination of possibilities and need to check several things sumultaneously. So wire three test lamps (use older filament type lamps so that they will draw a current more compatible with the load of your heating system components).
Lamp 1 connected to programmer 'hot water on' terminal.
Lamp 2 to the 'hot water off' terminal.
Lamp 3 to 'central heating on' terminal.
Connect a main supply to the programmer and run it in timed mode and then switch CH and HW separately (as when the fault occurs.) If the programmer is working correctly, the results should be the same, and as follows:
Hot water only on - lamp 1 on
Central heating only on - lamp 2 and 3 on
Hot water and central heating on - lamp 1 and 3 on