Red, when the filter bypass valve is open, oil simply bypasses the filter and goes on to the bearings unfiltered.
It is NOT wasted, returned to sump, or sent elsewhere in the space-time continuum.
So oil gallery pressure is NOT affected.
First thing I would do is to connect an accurate mechanical gauge and see if the dash gauge is lying.
Besides the possibility of a bad gauge, that engine used a gerotor oilpump that is concentric with the crank snout and a LONG oil pickup tube back and down to the sump. SOMETHING could be going on allowing air to enter the suction side of the pump. (Noisy lifters can be caused by aerated oil, as well as by low oil pressure.)
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