Water heater is a simple tank.........cold water in bottom & hot water out top. A bypass connects cold to hot.
You stated "....I open all valves ran water ....." CLOSE the bypass.
IF bypass not fully closed......cold water flows to hot and because of check valve in hot out only cold flows.
Same type of thing occurs at showers if not turned off with hot/cold handles.....cold mixes with hot and makes warm
As a side note.......should be an air pocket on top of water heater tank (by design). Air pocket controls increases in pressure due to heating of water (it expands when heated------funny thing about water. Expands when frozen. Also expands 1700 times in volume when changes from liquid to gaseous state)
Is it time for your medication or mine?
2007 DODGE 3500 QC SRW 5.9L CTD In-Bed 'quiet gen'
2007 HitchHiker II 32.5 UKTG 2000W Xantex Inverter
US NAVY------USS Decatur DDG31