Do you feel resistance as you turn the knob. I wonder if the knob itself is broken (was a problem with Honda Accords) or if the heater control valve is not opening fully. I believe the heater control valve is at the rear of the engine compartment on the firewall, it has two coolant hoses on it and a heater control cable attached to it, with the engine off get a friend to operate the heater control from hot to cold /cold to hot and see that the heater valve lever moves full distance and that the cable for some reason has not become detached. Also check the coolant level. Low engine coolant will affect heater output.
I just repaired the 3 wires(soldered) on 2004 Highlander for the heater control panel. The heat works BUT now AC doesn't turn on. The AC selection knob turns but doesn't change any air flow. The air only blows up the windshield. I checked the ribbon cable for the know and it seems ok. Any help apprecieted.