I've been experimenting for a few months with different hot water schemes 
for my Westy. I finally have developed one which is safe and efficient, 
and I thought I would share it in case anyone is interested.

I had already replaced the oem water pump with an RV type pressure 
sensitive demand type. These pumps are only about $50, and are easy to 
install in the compartment above the tank. New pressure water line needs 
to be run to the compartment under the sink, and then teed into the 
pressure line (grey) which goes up to the faucet. (Water will leak out of 
the old non-pressure unneeded line unless you cap it.)

My previous experiments had convinced me that it was too difficult and 
dangerous to run the coolant lines through the water tank. So instead I 
built a small 8" water to water heat exchanger. It's just two tight flat 
coils of 3/8 copper tubbing soldered together. Coolant flows through one 
loop, water from the tank in the other loop. I located the heat exchanger 
right behind the rear heater, so it was easy to tee from the heater hoses.

The trick is controlling the heat...and I'm quite proud of my solution. 
For $10 I was able to get a new water bed heater control unit. This is a 
mechanical one, not solid state. It was built to switch 110v, but it 
works just great on 12v if you just use it as a switch. The temperature 
probe goes inside the tank at the bottom. I set it to 100 degrees.

A small selenoid sprinkler control valve  is connected to the water bed 
controller. When I turn on a "water heater" switch, 12v from the ignition 
switch goes to the valve, opens it. This turns on the pump, which pumps 
water through the heat exchanger, and back to the tank. When the water 
get to 100 degrees, the valve closes, and the pump shuts off. The water 
stays at exactly 100 degrees as long as the engine is running. It stays 
warm for many hours after shutdown.

I have also installed a hand shower in the little space at the rear 
opening to the left of the A/C blower. 13 gallons of hot water is plenty!

--Dave Garth
San Luis Obispo