The apartment was finally rented out, so I had to solve the "hot through
the cold" dilemma and this is what I found once I took apart the ceiling in
the apartment below.
The previous owner decided to hook up the lower apartment's hot water to
the beauty shop's system (he did this when he remodeled things). When he
did this, he decided to try to hook up the now unused water heater, which
was marked for that lower apartment, into the upper apartment's hot water.
He did this, I assume, to give extra capacity to the upper apartment's hot
water. Now, knowing this, you all can guess what he actually did. The moron
tied the hot from the lower into the cold of the upper.
The reason I was confused was that this was in the ceiling which was
concealed till a few days ago. I knew something was stupidly wrong, but the
mis-marked WH threw me for a loop. For you philosophy/plumbers out there,
these things always prove Ockham's Razor.