steve what was the pressure gauge reading? is it still doing it?
I would follow the water path, can you disconect the pipe that comes from the pump to the pressure regulator? I would disconect this turn, on the machine and watch the water flow, this will tell you if the problom is the pump or leading into the pump.
can you disconnect the bypass pipe and watch what happens when the machine is running and you alter the pressure regulator, when you turn up the pressure the flow from the bypass hose should slow down until it stops this will tell you if its the pressure regulater that's at fault.
unscrew the pressure reguloter and clean the spring ( put a couple of extra washers against the spring to help the spring push).
Mike