The thermal expansion mentioned isn't what you think. What Ned thought, I
considered it too, is the problem when water expands while it heats. If
there's no place for the expanded water to go, it'll force itself through a
faucet, washing machine, or T&P valve. If there's a backflow preventer or
check valve on the water system, and no expansion tank on the heater, the
expanded what has to go somewhere. While it might be a possibility in your
case, I can't imagine it happening to a standard faucet with seat and
washer. I think the pressure would trip the relief valve every time.
You never mentioned how the washers or seats looked after you removed
them. If they don't look too bad, then, again, the seat threads are
suspect. You can do the experiments I described and go from there.
If you decide to change the valve, here are two suggestions to avoid
expensive ceramic work.
There's a very nice looking stainless steel plate that is designed to
cover the holes of a standard two handle shower valve. In the middle is a
big hole that holds a single handle faucet. A good plumber can cut out
enough tile to remove the old faucet, install the new, but still be coverd
by the plate. In this way, you don't have to worry about replacing and
matching old tile.
The other alternative is to attack the valve from the other side of the
wall. Assuming it's just drywall, fixing that hole is a lot easier than
messing with the tile. You might even finish it with an access panel for