I emailed my water heater guru...here's his reply:
Rich is correct....the air needs to be bled out of all the lines. But there's no need to modify any plumbing. Turn on the fresh water pump, then open the taps--both cold and hot that are FARTHEST from the pump and leave them open until the water flows smoothly and evenly at that tap. Then you go to the tap next farthest from the pump and do the same thing...working your way back to the tap closest to the pump. When all the air has been bled out of the lines, and water flows evenly out of all taps, the water heater will begin to fill. Could take 10 or 15 minutes but eventually the system will comeup to pressure and the pump will shut off. As long as there's air remaining in the lines, the pump may not shut off. But once all the air has been purged from the lines, it'll come up to pressure and shut off - as long as there aren't any leaks in the system.Note: the cold water "in" is at the bottom (of the water heater) and the hot water "out" is at the top - be sure you haven't plumbed it backwards. Also note that the electric breaker must be kept OFF until all the air is out of the system and the tank has filled, the system has come up to pressure and the pump has shut off... then and only the do you turn on the electric power....'cuz turning it on before the heating element is completely under water will burn out the element.