"DSV (DIVE SURFACE VALVE)The Dive Surface Valve (Fig. 1.15) is a neutrally buoyant one-way loop
“shut down” valve with a water purge. The rotating barrel is made of
stainless steel. The exhalation mushroom valve is seated on the right side
of the valve housing." (from the HP2 current manual).
Now show us the photo of the inhalation lower loop hose. You'll see the mushroom valve is contained within the barrel. My theory, i.e Theory Number 2, is that she left the lower loop hoses connected to the counterlungs and mistakenly attached the inhalation counterlung to the exhalation side (right). See also: The picture you've provided. By doing this, she blocked circular airflow completely, and precisely to the right of the right knurled ring in your photo. She would have passed every test, with the exception of the stereo test. She either omitted the stereo test, or performed it improperly. Please look in the manual to see if the proper testing procedure is outlined for us.
What I will be testing first is if the DSV can be screwed down to the wrong lower loop hose. IF that happens to be possible, I have no doubt that is precisely how she did it. And further, I will complete a full assembly and prove the until will pass everything but the stereo test.
Note: Hollis has engraved the airflow direction on the DSV to help with the stereo test, clearly evident in the photo you provided.