Thank you for your replies.
@Bannerman - Yes, I did in fact read and reread those specific threads and I was still a little confused with the terminology used in those threads versus the manual terminology NOT fully matching up to my tankless heater model manual section.
@fitter30 - Thank you. I actually received a call from a Navien sales tech trainer this morning, and he basically said exactly what you said. It "modulates" the amount of water intake from the cold water house intake cold water line to prevent a "cold" water sandwich from hitting the pre heater IF the WAV senses a certain water temperature = (IF cold water temp = X temp threshold, THEN look at current water demand being consumed and send a signal opening the WAV valve a certain Y% as opposed to full 100% of valve open = prevent the cold water sandwich issue). He spent the time to talk with me given my background. That cleared up a lot of misunderstandings.
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More details on the NPE 240A that was not in clear / vague (at least in my mind) after reading and re-reading the links provided by
@Bannerman threads (above) and the NPE 240A YouTube videos):
* If you have the NPE240A, there is NO 3 way valve (This 3 way valve is shown in many YouTube NPE 240 series videos that talk about lukewarm / cold water issues). These videos show the location and how to remove the 3 way valve (causing lukewarm cold water issues) and this can consequently mislead you into believing you have this 3 way valve in your NPE 240A. This part does NOT exist in the NPE 240A. I thought the WAV was this 3 way valve; nope.
* The check valve is just to the left of the Water Adjustment Valve (WAV) and is purely a non electrical device.
@Bannerman referenced a thread (above) and someone posted two picture links. The first photo is that check valve in the NPE 240A; it is circled. Note there is a question mark around the device to the right of the check valve; this is the WAV device
@fitter30 correctly identified. That second device (not knowing what and how the WAV was...made me second guess myself thinking that this was in fact the 3 way valve shown in the YouTube videos. Nope. The NPE manual does NOT adequately describe this device function and consequently made me continue to second guess myself if this device could be a contributing issue or the sole issue to my lukewarm water issue.
Compounding this second guessing in the manual....
If you look closely at the high level water flow diagram in the NPE 240A section of the user manual, the check valve AND the WAV (in the diagram) are combined into a SINGLE element. This is what really through me off and made me second guess everything. This is really a poor diagram when your trying to understand the true components of the system when diagnosing lukewarm / cold water issues. This diagram merely serves a very "high" level explanation "generally" how the water system flows but is NOT to be used for troubleshooting; dohh.
* To remove the 240A check valve, there is a "horse shoe" shaped retaining clip, (silver metal piece; some people call this a "C" clip). You must pull this clip up and out. Once this is removed, then you can pull out the check valve. Not sure if this matters, but my "C" clip had a red and black mark on the top of the C clip.
When you go back to install the C clip, the black marking is on the left side and the red marking is on the right side as you face the tankless heater and as you insert the C clip back after replacing the check valve. I had taken a photo of this before I removed parts, and I referred back to my photo showing the red mark on the right...just an FYI and not sure if this matters at all...I am just picky that way after having had issues with non tankless water heaters...specifically car engine motors, transmissions, rear ends etc. that are very picky.
* The check valve has four components. The long plastic barrel body, a plastic piston with an O ring, a spring, and a plastic retainer clip.
There are at least two different areas where this device can fail. (1) the O ring on the piston can wear out and (2) the plastic retainer clip.
In my case the plastic retainer clip failed. I noticed this as soon as I pulled out the check valve.
As I pulled out the check valve, the retainer clip fell off, which holds the spring and the plastic piston. Upon close inspection of this plastic retaining clip, there are 3 or 4 "male" circular shaped extrudes that follow the outer circumference of the plastic retaining clip. These "male' extrusions are suppose to snap into the "female" main plastic barrel area cutouts.
On my failed retainer clip, 1 of the teeth had broken /chipped away causing the spring and plastic piston to push against the interior wall of the interior main plastic barrel "cylinder" = friction = no movement of piston = cold water always introduced into system = cold to lukewarm water depending on where the piston landed and stuck inside the plastic main body cylinder. (For those familiar with piston to cylinder gas engine blocks....think of this as your engine piston hitting the interior cylinder walls....that would NOT be a pretty sight)
I noticed the O ring also was slightly eaten away, which may have contributed to some of the issues as well.
That's my break down of what I observed and the specific failure point inside the check valve.
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Prior to the check valve inspection, I removed all three filters on the bottom of the tankless body; while there was a little dirt (after 4 years of usage), there was nothing alarming that would make you go oh geeze, that is bad. Even the sediment trap was really not that bad. No red ferrite color build up; mostly very small sand/rock particles that got trapped upon close inspection.
I went ahead and purchased two of those check valves online since they were very inexpensive ( the shipping was much more expensive than the parts so I went ahead and ordered two).
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Couple of other notes the Navien sales trainer told me today when we spoke... you pros already know this but thought I would share with the DIYers like myself:
* For vinegar descaling, use 2 parts water to 1 part vinegar ratio and run for 90 minutes to 120 minutes. The few videos I watched ....no one mentioned the ratio, so I decided to ask the Navien expert since I was talking with him for Navien specific tankless heaters.
* He stated you can purchase and install an automatic descaling device that resides in front of your tankless cold water input pipe. While this can reduce your manual descaling intervals to perhaps every two years, you now have to maintain the charcoal filter once a year for this auto descale device. I am going to pass on this since I already had the sump pump on hand for other under the house water issues and it isn't a big deal to run vinegar through the system once a year.
Warranty info
* He stated if your Navien is = or less than 5 years old, then Navien will send you the parts for FREE under warranty along with FREE shipping. I would have qualified for a free check valve but I didn't wait for this call today and had already ordered the check valve online yesterday, FED EXed the parts.
Hope that provides a little clarity and help to the DIY community. Thanks everyone for your help.
Stuart