The red light on my Atwood water heater comes on too. I have read on the Atwood site that this indicates that the water heater is over heating. The heater has two thermostats, one for operating temp and the other is suppose to shut the unit off if it reaches the high limit. If it gets that hot the over pressure valve could pop open because it is reaching critical pressure. I need to replace the temp thermostats on mine. There is lots of info on the internet on how to do this. From what I have read the unit should not be operated until the thermostat has been repaired.