Well, it was the fuel heater seal that was leaking, not the seperator valve. I feel like an idiot, replacing 3 damn valves for nothing lol. I just couldn't see the top part of the filter, and I just assumed that it was fine because it was on tight and I had just replaced it, making damn sure that the old o-ring was removed, mating surface was clean, etc... I didn't know that the fuel heater was even a thing, never heard of it before. I did the Geno's delete kit and everything is fine now. It was just leaking down the side of the filter and making it look like it was the water seperator valve.
To anyone looking to do the fuel heater delete, it's easy if not a pain in the ass due to access. I recommend removing the intercooler pipe and the throttle linkage bracketry before even attempting it. (Take detailed pictures of how it goes together, and be careful of the tiny little clips that hold the throttle cables on. I just pulled them straight up with a pair of needle nose in one hand and a magnet right against it in the other hand.) You will be able to see and get to the fuel filter housing much easier without that stuff in the way. I used a piece of 1/16" or so thick metal about 6" long to unscrew the stock nipple. It's got a slot in it rather than an allen head. It came off fairly easy, just difficult to get it in the slot because you're working blind and at a terrible angle. Once you get the stock nipple off, the heater will just fall off. Unplug the clip, tape it up securely out of the way, Make sure the old fossilized o-ring came off with the heater, clean the surface up, and screw in the delete nipple. The delete nipple has an allen head hole which makes installing it much easier.
A topside creeper would make this, and many other jobs on these trucks, much easier. Especially if you're lifted.
I used silicone spray lubricant to aid in removing and reinstalling the intercooler pipe into the rubber boots. It worked great.
Also, you will still need to use the rubber nipple o ring (small diameter thick one) that comes with your fuel filter. I wasn't sure if it was only for the fuel heater or not, so I called Geno's and they confirmed that you still use it. The whole project took me about 2 hours from picking up the first tool to washing my hands at the end.
Oh, and do yourself a favor and get a metal band type filter wrench with grip bumps on the inside. The plier type and ones with the adjustable rubber strap did not work for me. Pliers can't get a grip because the filter is too close to the block, they just slip and rip. The rubber ones don't grip either, they just leave the band stationary and allow the handle to move freely. Junk.