With AC circuit breaker ON (CAUTION)
Electric element switch ON-----water in water heater!
You should read 120V AC at high limit t-stat (top ) and then 120V AC at normal t-stat (bottom terminal)
Then you should read 120V at element
Continuity --------power OFF
Just like post on 5/7/2015
2 terminals with 2 wires on element......1 black & 1 white
Test for 'continuity' between the 2 terminals........if no continuity element is bad
Test for 'continuity' between terminal with white wire and flange of element....if you have continuity then element is shorted and bad