Hello i just started my 8 kw hole house generater ran greatput my electric water heater on 26 amp draw andsmoke came out exhaust vent shut it down ran again great turned only heater on again took amp

RV water heaters are mounted against an outside wall. Go outside and look for a removable cover that has a mesh vent installed.
Open this cover and the water heater should be inside.

If the water heater is propane your propane tank may be low of fuel. Also very cold weather may not let the propane produce adequate vapor to fuel the water heater. A low level of propane can make this problem worse.

If the water heater is electric, you may have too large a wattage draw from other appliances, when the water heater is trying to heat. Turn off items such as hair blowers, AC, and Microwave when the water heater is on. If a generator is providing the electricity it may not have enough output. If shore power is providing the electricity you need at least 30 AMPs.

the unit has gone into over load
The total power requirement has exceed the output of the generator
for example if the generator is a 2.500 kw or kva then it will generate well at 1.8 kva or kw but it will not run forever at 2.5 kva -kw
When a ac is running the power requirement will be constant on the generator and with the fridge as well then the load will be at the maximum out put of the unit.
when the fridge starts again the extra load will exceed the max out put of the generator and it will slow down ( lights dimming ) and eventually go into overload mode
have an accredited electrician calculate your maximum load requirement for an external power supply and then get a unit that is at least 15.. kva kw better that required
generally fridges use 1000watts , ac conditions will draw over 3000watts and any thing else adds up . I am guessing that your generator is only 2500 unit

My first question would be about the outside temperature. What is the outside temperature?
Hot tubs that are designed to operate on 115v only have 1.5kw heaters and if the outside temperature is below 50 deg F they tend to not keep up to 103 deg water while being used. They are also designed to not heat while the high speed pump is operating.
Does it stay up to temperature on a normal basis?

ROD
US Parts Center

When you get the under speed alarm is the generator under load? Try manually starting the generator with no load and let it run for a while, if no alarm, then put it under your home load and measure current draw (maybe have an electrician check it) if the amp draw and in rush caused by compressors, pumps motors etc are within the generator rating, check your fuel pressure, on average 8-11 WC Nat gas. Pressure may test well under no load but drop starving the engine of fuel unde rload. Underspeed is just that engine cannot make RPM/Frequency

What size circuit breaker is on the generator that is tripping? You'll need a 20amp for AC alone, then consider other things that are drawing current when RV plugged in like , converter, fridge etc that may be drawing current at same time. Make sure fridge is on propane, as well as water heater if you have electric element option on water heater. AC may only draw 12-15 amps when running if good and clean and wired properly, but will draw 17-18 amps when compressor kicks in. Perhaps generator not designed for that surge?

Rheem makes a number of tankless models
http://www.rheem.com/products/tankless_water_heaters/

They make a tankless 95 outdoor series
http://www.rheem.com/product.aspx?id=EBA80FAA-3C0F-411D-AF83-82061C28ED1B

The 95 outdoor series spec sheet says .4 GPM minimum activation and .26 GPM flow to keep burner activated. The colder the incoming water, fewer users can take a shower at once.
http://globalimageserver.com/fetchDocument.aspx?id=ea5f0816-dfd4-4bcf-a605-79945619f5bb
The .4 GPM and .26GPM numbers are fairly typical for tankless units.
These numbers are good when the unit is new.
After a few years the number may be different because the tankless is a high-tech machine with sensors that are susceptible to particulate in the water, and susceptible to perfect-functioning of other parts in the machine.
The outdoor series spec sheet says the tankless is good to minus 30 F.
But remember that's when the unit is new.
Outdoor tankless water heaters have an electric heater that keeps water pipes inside the unit from freezing, as long as electricity is ON.
If electricity goes off, the house stays warm inside for several hours.
But a steel box located outside would get cold immediately without electric heat.
The electric heater adds standby cost to operational expense.
The tankless has a heater, but you still have to protect the incoming and outgoing pipes.
If your incoming water is very cold, the tankless heater may not be able raise the temperature fast enough to give two showers -or- even 1 shower depending on age and efficiency and capacity.
You can add a tempering tank located in naturally warm area that passively pre-heats incoming water before it enters the tankless burner.
It might be best to locate tankless inside the house >> and use direct vent through the wall for both incoming air supply and outgoing vent gas.
If incoming air is taken directly from the living space, then tankless will draw air into the house through cracks and around doors.
A lack of sufficient air, or poor air quality can cause the burner to shut down.

When buying a tankless, read the spec sheets and really ask questions about everything you don't understand.

What you need to know is there enough fuel going to the regulator. It should be 7 to 11 inches Water Column. If not your problem may be not enough fuel. That includes when the heater in your house kicks on and what ever gas appliance you may have. Once you verify that you need to figure out if you have the proper pressure coming out of the regular on the inside of the generator. Next I would look at compression of the cylinders. It may need new piston rings.