You did not state what your static water pressure is nor your GPM requirements. . . Anyway, I would certainly not go with the 3/4" line over that long of a distance. You should be looking at at least 1 1/4" or larger depending on your water requirements. There are different pressure losses for pvc pipe and poly pipe.

arazavi, In order to size a tankless heater you have to know (or approximate) the cold water inlet temperature... descriptions like "ice cold" and "very cold" aren't very useful to plug into a formula. Where I live I've measured it down to 33 degrees when it was -15 outside. A standard shower head is limited to 2.5 gal a minute. A top loading washing machine is 4+ gpm. You are using between 5 and 9 gpm. I was unable to find the "N-48M" heater that you described. Are you sure you didn't switch a couple of numbers? At any rate, a 200k btu/h heater will heat 8.5 gpm only 35 degrees. So, if you have 9 gpm you will be under that. At 5.5 gpm (two showers) it would heat 45 degree water to 105 degrees - which is the design temp for a shower. In other words, depending on your real cold water temps and the actual unit that you have, you may be undersized and causing the drop that you are speaking of. Remember, these units will throttle the hot water output if you exceed their capacity. Get back with better information and we may be able to figure this out.

Mine is a Little Gourmet by Mountain Plumbing. I love it, but somewhere in the 3rd year, we had to cut off the end of the rubbery tube that delivers the very hot water to the tap. The combination of very hot water (we keep it turned all the way or nearly all the way up), tube stretched over the connection and then the little wiggle caused by water pressure on and off eventually caused a leak right at the connection (sudden drop in water pressure at the tap). We had enough line that we cut it off and reconnected (2 minute fix), but I plan to go look for a stainless or other line that will hold up better for the long haul. Kind of like the installers suggest changing to a stainless supply line on your washer and dryer. If I had known that going into the installation, I'd have had no issues with it at all. Knowing it now, I'd still get the same unit -- just look for a better hot water line to install it with or replace after a year or two.

Something inside such as washer,seat or diverter is loose. May as well install a new kit when you take it apart to inspect.