Short and sweet. I had a new Water Heater installed 2 days ago (Works like a charm). The set-up is a pictured below. The next day I noticed a water droplet dangling from the Ball valve between the H.W.H. and the Air Handler (the valve was in the Open position). I get maybe 1 drop of water every 6 Hours, So it extremely minor at this point. I will put in a new valve. This valve is nearly dead center in the picture.
Now the problem, Hours after the installation I took a shower. The water was hot as expected for about 2 minutes then went increasing colder. So, I figured I set the WH to a hotter setting. (I Bumped it up 2 setting hotter.)
Last night, another shower. Same thing happened!
Umm, So I scratched my head and felt the unmixed hot water outlet on top of the H.W.H. No problem there it was plenty hot. Next, I figured maybe the ball valve might be the problem. So I moved that valve to the CLOSED position. Low and behold that seems to solve my shower problem. I had plenty of hot water for the duration of my shower. Yippee!
For the life of me I cannot understand what is going on here. How could this valve (between H.W.H. and A.H.) cause me to have diminished hot water in the rest of the house? Any ideas out there??
I got to get this solved before the cold weather hits.
Thanks Guys & Gals PHOTO link below

[i12.photobucket.com]

Who installed that? Is there a check valve in that line? If not, you draw cold back through the line. Do you get enough btus out of it to heat the house? How do you protect your family from Legionella?

You should have a check valve between the water heater and the heating coil to prevent the cross over of the cold water into the hot. You should also have a check valve between the water heater shut off and the return water from the heating coil. A ST-12 expansion tank should be installed on the cold side piping at the top of the water heater. What is the btu rating of that water heater? A standard 40,000 btu 50 gallon water heater won't be enough to properly heat the water and house.