Is there ANY possibility that you might have miswired something when you replaced the thermostats? Did you have or make an accurate diagram of just which wire went to which terminal on the two thermostats before you removed them?
I should have asked before, but is the "red button" you refer to
*really* on a high temperature overlimit thermostat. i.e. is it part of the upper thermostat assembly or otherwise on something in thermal contact with the tank shell?I'm frustrated, 'cause I know that if I was on the scene with my clamp-on ammeter/VOM I'd have been able to diagnose it much better.
BTW if you *are* going to change out the elements, and they are threaded into bosses on the tank shell they'll have a large hex section on them and you'd be well advised to pick up an "element socket wrench" to unscrew them with unless you have a socket of the proper size already. They usually don't like to come out if you go after them with a pair of Channelock pliers or an adjustable wrench, and you can screw up a new element trying to tighten it firmly without a socket wrench. Those element socket wrenches are usually stocked right near the elements and only cost a couple of bucks.
Good Luck,
Jeff