[rcwiegand]

Yes, the hot water heater is for the freshwater system. On my 35 Open, the hot water heater is in front of the bulkhead on the starboard side. I have to access it from the cabin behind a seat back. Even though it is in front of the bulkhead, mine drains to the mid-bilge and was the source of the water. Maybe there is a drain from that area to the mid-bilge under the bilge pump.

Also, I believe it takes a great deal of water to kick on the mid bilge auto switch. I turn it on manually when I see water in the mid-bilge.