I found the reason why cold water is flowing back into Water Heater through the Hot Water exit pipe, but how do you fix this? I have a shower with a balance valve and all my faucets are single lever except for bath tub. When I close cold inlet to water heater, so I can drain the leaking water heater, it starts filling up with water through the hot water pipe instead.
So now I have shut off entire supply of water to house. Removed old water heater and ready to install new one. I should open only tub hot water faucet once new water heater connected to purge and all should work. Right?
I guess all this means that if you have a balancing valve in the system, you will need a shut off on the hot water-water heater side as well as on the cold water side. Otherwise, if you have a bad water heater, you have to shut off whole system. Right??