Probably built up scale and the normal cooling of the heat exchanger and tank during the night. The heat exchanged in a gas water heater is often a metal spiral running up the middle of the tank, and held in with just a few welds at the top and bottom. As it cools and heats it shrinks and expands and rubs on the tank wall creating all sorts of odd noises. It may become stuck, and make a single larger movement that can be relatively loud. You may even hear sizzling from rain or condensation in the flue falling onto the hot heat exchanger. The scale in the bottom of the tank and on the heating column can make all sorts of pops, grinding noises, an occasional squeal, etc. as it changes size with temperature, breaks off, and then falls to the bottom.

Both fiberglass and poly pipe insulation can be used all all the types of pipe commonly found in residential construction. The designation that it is for Iron Pipe or Copper Tubing is simply telling you the internal diameter of the insultion. Pipe is defined by its "inside diameter" commonly expressed as ID and the size is officially listed as "IPS" (iron Pipe Standard), while "Tubing" is defined by its "outside diameter" commonly expressed as OD and officially listed as "CTS" for the copper tube standard. By example, if you have a 1/2 galvanized iron pipe the internal diameter of the pipe is 1/2" but the outside diameter is equal to the inside diameter and two times the wall thickness, thus a 1/2" iron pipe actually has an outside diameter which is slightly larger than 3/4" so the internal opening in the insulation for 1/2" iron pipe has to be slightly larger than 3/4" to reach around the pipe. The IPS standard is a standard dimensions for iron pipe that is published by the ASTM ( American Society for Testing & Materials) and it is fundamentally the same for Galvanized Iron Pipe, Brass Pipes, PVC pipe & ABS pipe. CTS is the ASTM standard for Copper Tubing, but it is also used as the standard for CPVC & PEX tubing so if you want to insulate PEX you would select insulation that is sized for copper tubing, although even if you were to use the IPS size, which is larger and would fit rather sloppy, none the less it would insulate just as well. (In fact, a purist could probably make an argument that the larger insulation might insulate slightly better because the additional trapped air space is also insulating.) Pay very close attention to the insulation when you buy it. Some insulation is formed as a continuos tube, while some is a continuous tube but it has be cut lengthwise and a glue and a thin plastic separator has been put in the cut. The continuous length type is often used when the insulation is being installed during initial construction because the pipe can be slipped through the insulation before being fitted into place. If you were to try to use that type during a retrofit you would not be able to get the pipe inside the insulation unless you either disconnect the pipe or cut the insulation. For retrofit The poly type is much more user friendly because it is flexible and easy to use in tight quarters. It is also the best for insulating PEX because often the PEX is bent around a corner in a continuos run rather than using an elbow, however when doing so the PEX has a long radius bend which is very difficult to cover with rigid lengths of fiberglass insulation, whereas the poly will just bend with it. For retrofit such as your project when you get the insulation make sure you get the type that has the opening on one side. You then open the insulation, slip it over the pipe, then pull the protective strip and the glue will seal the opening on contact. When you come to a tee you slip the insulation of from the opposite side of the tee side opening and just continue running the insulation in a straight line. You then go back and slip another length of insulation on the line connecting to the tee and slide it up tight against the insulation covering the tee. You need not worry about gluing it because slight gaps here and there will have nearly a negligible effect on the overall run.

Thanks for the info. Can we have an old style gas water heater (in the attic) AND tankless water heater downstairs servicing the same house and gradually phasing out the fixtures (room by room) with end result of eliminating the old gas water heater after remodel complete? This post has helped me realize that my main desire is to try to do this in phases rather than one job (which I'm sure would be cheaper.) For one reason, the smaller jobs help us evaluate the contractor and decide whether we want to continue using him (he gets to evauate too). It also helps us keep from having so many "change orders" before job is done as we learn more about our 77 year old house. (think I will cross post this in the "old house" forum as well) background: I think we are committed to going forward because we LOVE our neighborhood but neighboring homes are old like ours so besides prices being quite high though footprints are small (in center of major metro area), we are afraid we would buy another old home that was in worse shape than ours and would still need to do work.

I went through the same thing, in my case the drain line was leaking. The location of the leak was identified and they fixed it by tunneling under the slab. I know of other individuals that had jack hammering done, key to jack hammerting is to seal off the area and get very good professionals to repair afterwards. The source of the leak has to be identified first, it may not be under the slab but a leak in say the tub, shower etc.