I also think you may have a faulty Thermal Cut Out

A faulty TCO will have no continuity across the two terminals (The black thing on top of the heating tank)

Therefore a good TCO will have power at both connections and a faulty TCO will have power at only one.

(The function of the TCO is, if the water over heats it cuts the power off to the elements)

See Video.

http://www.youtube.com/user/showerdoc#p/u/2/_zi8JbEMYMs