Hope this thread is still active. I just installed my return line to the bottom of the tank. I also put the pump (Watts 500800) in the return line because I didn't want to potentially limit the flow on the hot side. Water circulates fine but as I shower the water gets progressivly colder. I had assumed I was drawing cold water up through the return line, but I believe the pump has an internal check valve.
#1. Is it possible the temperature at the top of the tank is being diluted that quickly?
#2. Am I, in fact, drawing cold water backwards through the running pump?
#3 What about plumbing the return line back to the top of the tank, not through the dip tube inlet, directly to the top.