Water Stinks with recirculation pump
OK. I will keep this as short as possible but there are a couple of things to consider.
First, stinky water is usually caused by a reaction between anaerobic bacteria (present in some water supplies) and the magnesium and/or aluminum anode rods used to protect the water heaters. This reaction creates hydrogen sulfide gas, causing the classic "rotten egg" odor. If you have a water softener the problem is usually worse.
If you don't have a water softener, the best way to correct this is usually by replacing the anode rod with one made of zinc and aluminum. The zinc is critical to stopping the smell. If your heater has more than 1 anode make sure you remove the other old one or you will be canceling out the benefit of the new one. I know you have had the anode replaced already but if the new one doesn't have the zinc you need to do it again.
If you do have a water softener, a powered anode should correct your problem but will cost a lot more, $200 and up.
As for the pump, it sounds like you have a Grundfos or Lang type designed to move the cooled water from the hot pipe to the cold to keep from wasting water. These work very well but, as you mentioned, they have a tendency to make the cold water warm for a few seconds.
There is another system, the Metlund D'mand System, which is much more efficient and minimizes the issue of warm water in the cold pipes. It does this by moving the water much more quickly through the pipes. It also costs more so that is a factor to consider.
Hope this helps.
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