Well, I don't know much about Hydro-Hot units, but when a problem like that happens to an Aqua-Hot it is usually the mixing valve in the back of the unit. The water coming out of the back is really too hot to send down the line, so the mixing valve mixes some cold water into the hot water to bring it down to about 140 to 120 degrees. This valve seems to always get stuck in a way that sends cold water down the line.
I think if you had a problem with a cutoff switch it would be affecting your heating capability as well as your water supply. But, you say the heating part is working well.
As noted above, Roger is your very best source. But, i would not be surprised to find out that you have a problem with your mixing valve. Those who write about this problem seem to resolve it by tapping on the valve with a small hammer. In a worst case situation, it has to be replaced.
2003 Beaver Patriot
2014 Honda CRV Toad