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The return line comming off the TBI or in your case the regulator will not have more than a few pounds of pressure (at most) because there is no restriction in this line. A pump builds up pressure only against a restriction. So no, the switching valve going bad was not due to your setup. The fuel return needs to go through the switching valve so the return fuel goes back into the tank from which it came, other wise two full tanks with a Y-pipe like blueX mentioned would overfill the other tank. Check your selector switch and wiring, then replace the valve with assurance that it was just worn out.
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