I know this question has been beaten to death, but none of the threads describe my situation exactly. I have well water so it is a constant battle to avoid the smell and discoloration. Recently I noticed that the brine tank was not emptying (salt) at the same pace as usual. Thinking it was a clog somewhere I emptied the tank and poured in some "Iron Out". Since then the hot water began to turn orange after it sat in the tub/sink for a few minutes (some sediment after drainign the tub, but nothing visible prior, just the color). Prior to this the water was starting to smell like iron, but the color was fine.
Thinking the hot water heater (only two months old) was filled with untreated water I emptied the tank (shut off the cold intake, opened a faucet and drained the tank). Thinking the water in the sotener needed to be treated I recycled the system and left the hot water tank off for several hours (the tank was not completely empty as some water was still running out of the hose when I closed the valve). Problem remained.
After reading about the difference between "Flushing and Draining" I attempted it again. This time if left the intake on and drained the water for a minute or so. Still brown after siting for a few minutes. When I run the hot water to the point it turns cold it will no longer turn orange. However, once I wait long enough to get hot water again the process starts all over again.
Any help is greatly appreciated as I am at wits end. By the way, the cold water is fine, the pipes are copper and again the heater is only two months old.

Thanks

 

It sounds to me iron water got into the heater, coated it, and when good water got in there, started to clean the inside. Drain about 2 gallons from heater, add one gallon bleach, refill and let sit for 1 hour. Flush through ALL hot water lines until bleach is gone.