[no subject]

The lack of low voltage feeds to the water heater suggests to me that
there's a switching power supply capable of running from 240 volts inside
the unit.  They are a known plague to X-10 and could be the source of the
noise that Dan has suggested might be the problem.  If so, it might be
possible to filter only the control circuitry inside the unit, but it
wouldn't be a very clean fix and it would probably be impossible to get it
inspected with such a jury rigging.