I began this theory with a question based on an answer from Yahoo Answers. I thank the user AVATAR KORRA for planting the seed for this theory. I think its pretty spot on.
I recently watched AVATAR THE LAST AIRBENDER, and in the episode, the one with Guru Pathik, the Guru goes through all the Chakras with Aang in order to control the Avatar State. The second to last chakra is called "Ajna" The Light Chakra. And its location on the body is, guess where(?), the forehead. RIGHT WHERE AMON PLACES HIS FINGERS WHEN HE TAKES AWAY BENDERS ABILITIES! The "Ajna" chakra deals with insight, "the instance of apprehending the true nature of a thing", and it is blocked by illusions. So it all makes sense.
Amon places his fingers on a bender's forehead. He blocks his or her "Ajna" chakra (not their chi). This essentially keeps the individual from realizing that they have their bending abilities. They lack the simple INSIGHT to understand that its (their bending) NOT gone. Amon basically casts an ILLUSION over the bender to make he or she believe he or she has lost their bending.
Guru Pathik actually says the greatest illusion is one of separation, the idea that things thought to be separate were in fact one in the same. Aang used this to mean the four nations, but the same, but it is also analogous to what Amon is doing. Separating the person's ability to know that he or she has bending abilities.
So every bender who has "lost" his or her bending still has their abilities, but it is Amon's "chakra blocking" which makes the bender think they have lost their abilities by separating the person and their bending (illusion). It will be up to Avatar Korra and the individual bender to unblock the chakra and come to the realization, they still still have their bending (insight).
Furthermore, if you look at every instance when Aang performed energy bending, he touched the victims forehead and his or her chest. Even the Lion Turtle was shown to touch Aang's forehead and chest when teaching him energy bending. Amon only touches their forehead, his other hand is used to force his victim's head upward.
In regards to how Amon is able to resist bloodbending, I think it is most likely due to not being one-hundred percent human. Seen in the third season of THE LEGEND OF AANG, the character "Combustion Man" is seen to be wearing advanced robotic/mechanical limbs. It is not unfounded to think Amon could have a metal arm and a metal leg. If so, a water bender could not bend them since they contain no water. Why a metal arm and a metal leg, because seen in the episode where Tarrlock attempts to bloodbend Amon, he (Amon) is shown to be temporarily weakened by the waterbender, but manages to pull through. Watch closely and you can see Amon move one arm freely and then one leg, while the other arm and leg are being controlled by Tarrlock.
This theory is completely in line with what the show has given us, in regards to cannon and back story. It makes complete sense and does not use crazy conjecture like a lot of other theories I have heard.