First thing I'd check is the dip tube. In the mid 90's, there major manufacturer of dip tubes for most water heater brands had quality problems and the dip tubes had a very high failure rate. Some failed sooner than other, so you may have one that failed a bit later than most. At any rate, it's easy to check. The dip tube is located in the water intake. It is usually flared and simply sets under the nipple. The tube hangs to the bottom of the tank and carries the cold incoming water to the bottom of the tank where heating occurs. Since hot water rises, the water at the outlet at the top of the tank is always hot. When the dip tube fails, the cold water mixes with the hot water at the top of the tank and cools it out so you run out of truly hot water quickly. To check the tube, turn the water intake off, relieve the pressure by opening a hot water faucet briefly, then remove the pipe on the intake on the tank. You should be able to see and feel the dip tube. Snag it and pull it out. If it is good, it will still reach the bottom of the tank. If it is bad, there will be just a short stub. Dip tubes are cheap and available at most hardware stores and plumbing shops. You may have to trim one to length. The old one is in pieces and there is nothing you can do about it. Unfortunately, the debris from the old tube will require you to clean the aerators on you sinks frequently as you can never flush all of it out of you tank...at least I haven't been able to clear mine. The only option is to replace the entire tank, but that is a rather expensive cure. Of course, if the dip tube is still intact, then the thermostat might be the next place to look.