Okay so interesting problem with the water tank. So I check the top element and I have 240volts across and remove one wire to test the element and all seems fine. Well the bottom element I have 120volts on one leg and nothing on the other leg. Could the t stat on that element be bad?
You have to understand how electric water heaters work...
The upper element is the primary element.
The first thing the power does is feeds through a pushbutton overheat safety switch. This breaks both poles if the tank overheats. From here on, one leg of the power supply is always hot and simply feeds one side of both the top and bottom element.
The other leg feeds the top single pole double throw thermostat. When the water at the top of the tank is below the temperature setpoint, this stat opens the feed-thru to the lower and closes with the top element. Only one leg is switched. This powers the upper element until the top of the tank is hot. Then it opens the contact, simultaniously closing the feed-thru contact to power the lower element.
Now the lower element also has a thermostat and this one is a little smaller because it's only a single-throw. If the bottom of the tank is warm enough nothing happens. When a hot water tap is opened, this is where new cold water is introduced, and the lower stat trips closed and the lower element heats the lower portion of the tank.
This is why you read 240v at the top element, and 120v at the lower... they're never both on at the same time.