I just happened to come by this forum for maybe the second time in several months. This gets into several issues that are about technology. There are several very sharp people who address these sorts of issues daily, but on other forums in this group. See "irrigation" which is under "professional topics", and especially "plumbing" and "electrical wiring" under "That Home Site" (linked). I suggest you repost this on the electrical wiring forum. I promise you will get useful responses quickly. It will be better to get others involved from the beginning. Now, a bit on your questions. Number twelve would not handle a second pump at 500 ft, you are limited to one 1/2 HP as it stands. Voltage drop is already an issue at the 3% voltage drop standard, probably okay at the 5% overall drop standard. This is based on a nominal 4.9 amp draw for the 1/2 HP. Alternating pumps would be technically possible but probably not the best solution. Could the storage tank be located near the house? It would be simpler and probably better to have independent power to the second pump. Output from a good 1/2 HP sub in a tank at the lower elevation would be about 9 gpm at 50 ft. + 50 psi. That might be a little small. I also wonder if the storage tank could be smaller. What sort of flow and volume demands would you like to serve? What is the time frame? Answers to those questions will influence the choices for the second system. Here is a link that might be useful: see plumbing & electrical forums

If I were going to guess, it would be that you got the two sides reversed. That is, you connected the cold to the outlet and the hot to the inlet. Most all the new WHs I see have a restriction valve in the inlet and outlet to make sure that hot water does not flow out the cold side.

My lower drain has a special two channel device to allow the heat pump to transfer heat into the water heater, especially nice when in the air conditioning mode as this is then throw away heat. This makes the channels smaller than the 1/2" pipe thread hole...they have become plugged before, and I have replaced the HW tank once about 8 years ago. I do not plan to replace the tank at his point, it is a glass lined upper end GE 12 year tank, and I am planning to move the heat pump tap to the cold in and hot out at the top of the tank, this should allow my heat pump to draw water from the cold dip tub, and push hot water back into the top of the tank. As this will be done with a full 1/2" "T", I think it will not have the same problems I have experienced with the crowded double use of the drain hole for the same purpose. That said, I have to remove the tap in the bottom of the tank and I don't want it to suddenly let go and dump 50 gallons of water in my basement. My plan is to return the lower drain hole to drain only.

Regardless of the logic that a tankless T&P may not need to be gravity drained the prevailing policy of the local plumbing inspectors is what matters and will get you a red or green tag. If the tankless doesn't need to be gravity drained it may take many years to filter into the codes. I think I read somewhere that Watts, the manufacturer of the majority of T&P valves, that in order for the T&P valve to meet spec has to be gravity drained and they don't mention tank or tankless as a distinction. Look at the last paragraph on page 2 of the following link... http://media.wattswater.com/ES-10L-100XL.pdf You can call the inspectors and ask, but I'd want something in writing that the current install is OK. Was this tankless install permitted and inspected? Since this concern is documented in the home inspection and you are bound by disclosure to offer that info you are right to want to get the answer and do what is necessary. Let us know what you find out.