Thank you KlausC, this is very helpful and makes sense.
The ACC on 2001 seems to be very similar to the pre-2001, there is a small grille with the sensor visible.
I even have an idea what might have happened. I saw a lot of dust in this grille, and cleaned it one day. I used a toothpick to get the clumps of dust out, and moved the thermocouple a few times. maybe I broke it off?

I think the motors and dampers are OK, since they can deliver both cold and very hot air, so they can move all the way.

As a side note - the ACC system behave oddly from the day I bought the car (used) 6 months ago. I never used AUTO button, yet sometimes when I start the car it goes into AUTO mode, with AC on, full air flow, etc.

I think they do not have a blinking light in 2001+ because they can now display messages on the trip computer. (So there are also no lights for low coolant, low washer fluid, etc - all in messages).

I will pull the ACC panel and check it out.

Yuri