"I have an at grade basement (walkout) and I would like to put my water heater there. It will be either a direct vent or power vent. There is no problem with this correct?"
No. But, the critical point is vent termination. The manufacturer's installation instructions will have the allowed tolerances for set back from windows, overhangs, etc.
"Is it ok per code in CA to use the water heater for DHW and radiant heat, as long as the radiant is a closed loop using a heat exchanger?"
It is allowed. But, using wood as a heat source may get you in trouble with with your local air pollution control board.