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I just had this exact problem. It kept getting worse until we had no water. Our Rinnai tankless hot water heater started the same way though, with hot water for a few minutes and then would shut off with an error code 10. We just had to shut the hot water off and then back on, wait a minute or so and we had hot water back for a few minutes. Our unit would come on with a loud vibrating noise and remain until it shut off with an error code 10 (air flow fault). The solution was to remove the blower fan and blow out the squirrel cage. Ours had moths in it. We also vacuumed out the fan housing. Be careful to mark any wires you disconnect and take pictures before removal. Our unit is now almost silent when it comes on and supplies endless hot water.
The hot side of the faucet is most likely plugged with something that came up thru the water system. The average thankless waterheater requires at least 1/2 to 3/4 gpm flow rate for the unit to sense flow and turn on. If there is not enough flow it will not fire and heat the water. Not sure about this particular unit but a few require at least one full gallon per minute flow. So chances are that if you fix the faucet, you fix the hot water issue at the same time
First a question. Did you fill the water heater until water ran freely at the hot taps. If not you may have had an air pocket and blown an element. Water heaters will always be shipped with the ECO in the reset position. The reset is a RED button located under the upper cover for the thermostat. Shut off breaker to water heater and remove this cover, and the fiber glass, then push the reset. Replace the fiberglas and the cover securely and turn on power. You should actually hear the heater in most cases. Remember that it takes about 45 minutes for a full tank of hot water from startup.
The button could be stuck on the thermostat or needs replacing. You try to reset it by putting the screw driver head against the reset button and bump the handle with your hand to try to free it up. I have tried that and it free up one, reguardless if it didn't you would have to replace it any way if it is bad.
The button should pree in to reset, also check element's out they can short and throw your breaker.
Too many possibilities to solve without being there. If you have to reset it, that means that one of the many safety switches kicked in. Be careful that you don't make it a habit of resetting it without getting it checked, doing so will mostly likely cause a lot more problems.