When we bought our house, it came with a decommissioned water softener in the laundry room. The pipes behind it (I'm assuming in and out) were capped off with plastic plugs that toggle back and forth. If you're familiar with Dr. Dolittle, I'd call it a pushmi-pullyu setup. (sorry, I'm an admin, not a plumber). Some time last year, one of the kids bumped one, and water came shooting out of the pipe. We toggled the plug back and it stopped. For the last few months, we've constantly heard water running, and it's loudest near that spot. My husband went completely through the crawlspace, no puddles or drips under the house. My theory is that there's a constant flow of water in and out through those pipes. When I checked the water meter by the street, the dial was moving at about 1 click every 5 seconds, and the utilities company said it should be barely noticeable. Needless to say, our water bills are twice what they were a year ago! My husband swears it's something between the house and the street, but I'm willing to bet this is the culprit. Please tell me I'm right, and that it's a relatively easy fix!

Below is a picture of the setup. Pardon the grunge, but I've been terrified of bumping it and setting of the geyser again!

Thanks in advance!

http://i10.photobucket.com/albums/a1...ener_pipes.jpg

First of all check all of your toilets and faucets, inside and out.

What you have taken a picture of is called a By-pass valve. With the red dial pushed in you have made it so that water passes through that middle pipe and on through the rest of your house.
As you noticed when your child pushed the blue dial, water comes through the pipe and out onto the floor (what should be into the softener when one is attached) There is a good possibility that you have some corrosion in that valve and the water that is going through has to pass through some gunk, that could cause the noise. As far as running water is concerned, as long as there are no drips coming from those valves you water is somewhere else. Look in your toilets and see if the water is calm or if there are ripples, then take the top off the tank and see if any water is running. Sometimes it is almost imperceptible unless you are really looking. Make sure that the plug is sealing and not letting water out once it's down. Those are the most common running water culprits.

As far as your by-pass is concerned, is it against that wall behind it? If so pull it away from the wall and see if the sound stops. Sometimes the vibration against something can cause that noise.

Are you looking at putting another softener in? If so we can help. Let's get your water bill down to normal and then we can talk about some options.
Let me know if you find anything

The by-pass valve just magnifies the water leak that is located somewhere else in the house.

If you do not plan on using softener, cut that by-pass valve out.

That is a culligan push bar by-pass, if you have not pushed the by-pass fully over it will make a noise. I do recommend removing the by-pass and coupling the pipes back together and see how that does. A by-pass can not magnify a leak, there are rubber o-rings inside the by-pass assembly and water is trying to force pass them.