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My family has enjoyed the convenience and health benefits of drinking bottled water for several years. We have used a drinking appliance where the bottled is upturned and the water is gravity-fed. The water is then heated and cooled and served from hot and cold spigots. (I've seen other types of dispensers when the bottle goes upright inside the cabinet and is pumped into the water pitcher.)
The heated water quit working recently but the refrigerated part was OK. After noting how some members of my family used the dispenser, I have solved the problem. It is caused by the water level running too low in the mini water heater causing the element to burn out. Low water doesn't harm the mini-frig part. Low water levels are caused by using the bottle past empty and continuing to take water until it almost stops coming out. This "starves" the water heater, consequently burning out the element! Always replace the bottle on top before it gets past empty! If it gurgles considerably, it's filling up a nearly empty water tank probably with a burned-out element.
Maybe manufacturers can address this problem of too low water levels in subsequent models.
I just had this same problem. It had to be something with the flow from resevoir to first puncture needle...then I realized that I sometimes used the "use your own grounds" accessory, which in trial and error, had sometimes over-filled. So I figured grounds have clogged the top needle, as opposed to the exit needle that support pages always talk about. I filled the resevoir with hot water and ran that through. The hot water + the brewer making it even hotter did indeed loosen up some old grounds up there and cleared it out...and then I did it a second time to get a little more. If hot water doesn't work for you, try some CLR, but don't use the machine normally. Let it sit in th resevoir for a bit, then use the machines drain function without heating the CLR. Then run a few water cycles through to rinse out the CLR.
I would say that the dispenser is at fault. These water dispensers use gravity to release the water and won't allow overflow. The air pressure in the bottle comes up through the dispenser as water flows out. Your dispenser is not seating against the bottle correctly. Look inside at the gasket material that the top of the bottle rests on when it is in the inverted position. That's where the problem lies. The leak is happening right there where the bottle rests down in the reservoir. Look at that seal, it's damaged. Leaking...