Don't quite get pressure regulators on hose bibs and a couple other things you said, but...... Assuming you have, indeed, attached somewhere in your line a water-pressure gauge that is reading 125psi, that is too high and you're going to be having problems -- if you haven't had them already. You are right to be concerned about this pressure reading. Your static household water pressure should be, maybe, 60-65 psi. Believe code maximum is something like 80. The fact that your pressure reading is seen to decrease when you flush or open a spigot is typical. Don't worry about that. Assume you have city water supply. If so, I'll further assume there is a pressure-reducing valve attached to that supply-line just downstream of the meter. That PRV has failed and will need to be replaced. This is not complicated but will probably cost a couple hundred dollars to have somebody do it. It will be your responsibility as homeowner to take care of it. However, it should be undertaken at the earliest possible moment -- like today, right now. It is very important. Your household plumbing will not endure 125psi for long without giving you trouble.....likely expensive trouble. If I'm wrong about that and you're on a well, that's a whole different set of considerations. Please advise.

Thank you both so much for sharing your knowledge. Randy427: I would have thought our units were enough to run only two hot water outlets at the same time but the Rinnai RL94 significantly reduces hot water flow from the sink when the HE washing machine is running. The Noritz significantly reduces hot water flow from the shower when the bathroom sink faucet is turned on. Aliceinwonderland: We are in Southern California and I have wondered about scale deposits but it seems odd that it would begin affecting both water heaters at exactly the same time. The 3 year old Rinnai manual says that it does not need to be flushed if using a scale inhibitor. The 10 year old Noritz was installed before we owned the home and doesn't have a valve to flush (not sure why not). We had a plumber come to look at it about a year ago and he said his maintenance procedure was just to clean out the dust and dirt that might have accumulated under the cover.

You didn't say how you T'ed but there isn't much to go wrong with a ordinary copper fitting. I'd suspect that you picked up a piece of sediment somewhere, which isn't uncommon if you shut off the main water supply. I had a Pfister faucet that had sediments filters built into the supply lines on the inlet side. Or a piece has worked its way into the cartridge which will need to cleaned out or replaced. What you might try doing is disconnecting the cold supply line and putting it in a bucket or something. "Plug" the spout of the faucet with a rag, turn on the hot water and turn the lever towards warm (or open the cold valve). That will force water backwards, down the cold water supply line. Needless to say that can get a little messy so you might want to have a help and a few extra towels for clean up.

I have the water heater completely disconnected and hoses running from the pipes sticking out of the wall. The hoses run down into the washing machine. When I turn the main water line on water comes out both pipes at the same pressure. This has nothing to do with a water heater. Since the pipes are inside the wall I cannot check them for a crossover pipe. The last water heater was in 2012 and I don't remember having any problems with that tank type heater. In 2012 I added a tankless water heater and it never worked right. So I decided that I wanted to change back to a tank water heater. As a test and trying to remember which line coming out of the wall was the inlet, I put hoses on it and put them down in the washing machine and turn the water on to see which one produce the Water. Surprise, they both shooting water at the same high pressure. There is the problem.