I don't see a problem, unless the outlet air from the heater is hot enough to soften or melt the water container. Remember to put an air outlet on it. Probably won't get hot enough for expansion to to be a problem, but best not to heat a totally-full jug.
I've been happy with my installed Suburban WH's, but they do require a sizable hole in the side of the van. My '06 Tiger uses a 3-gallon manual-light version. Nicer than it sounds, since it can be set to use just the pilot light for protection in freezing weather. But I gather you don't have an actual water 'system', so you'd need a pump and all that stuff.
The little LP heaters for tent campers would work, but you's need to provide a safe spot and ventilation without fail.
May I ask about your Propex furnace? Where'd you get it? How noisy is it? Any problems?
Jim, "Strong, like a bull. Smart, like a fence post."
'06 Tiger CX 'C Minus' on a Silverado 2500HD 4x4, 8.1 & Allison (aka 'Loafer's Glory')