On John Marucci's video he has 3 valves one is on the pump which determines what the pump draws from the fresh water tank or the short hose (used for anti-freeze bottles). Then he has one, the second valve, on the water heater discharge hose (hot water on the top of the tank) and the third valve is on the feed side (cold water) for the water heater.
In using his setup you position the valve handle in the direction you want the flow going. If the valve handle is on valves 2 & 3 are pointing toward the water heater, that is setup for using the water heater and not in the bypass mode. If both handles are pointing in the opposite direction then the flow of water is bypassing the water heater.
My assumption is that on your 2014 you have a different configuration with the valves. From your description of the valves the red to blue valve should be in the open position which you have indicate that it is (that allows cold water to enter the hot water side of the system. The red to red valve should be set to allow water to flow from the red to blue valve into the hot water system and not back feed into the water heater. The blue to blue valve should be closed going to the water heater. You should even have a dedicated cold water line to the cold water system.
From the results you are having I believe that your red to red valve is set incorrectly.
Hope this helps but when you get ready to use the water heater just insure that it is getting water and is pressurized before turning on any heat either gas or electric.