If the electric isn't working right on the hot water heater you should still be able to use it on propane.
However, as Dan said, we need to figure out where the leak is.
When hooked up to city water you shouldn't even need to use your pump or the fresh water tank, so turn the pump off.
After that . . . are you still getting the leakage?
No matter what you should report your issues to your dealership so that they can know and record the problem in case you need to use the warranty to fix this problem.
Too bad you aren't coming to the Colorado Heartland Owner's Club (HOC) Rally in Ft. Collins next weekend . . .
You'd probably be all fixed up in an hour or two.
Even if you can't attend the whole weekend, perhaps you can drive up and meet the crew . . .
You'll want to join the club after that!
Again, if I can help I can come down to the Springs sometime . . . although I'm pretty booked up next week!
- - - Updated - - -
When I hook up the city water to fill the water lines, I generally open up that valve at the top of the water heater to let the air escape while it is filling up (see, I'm not as dumb as I look . . . but almost!
).
Once water starts coming out of it I close it.