Hi
This problem exhibits itself in gas heaters as well. Usually in those it is a thin film on valve seats that glues up over the summer period of not being used. A firm but gentle tap to the side of the valve usually sorts it out. Problem with water heaters is that the gas use is much higher than space heaters generally. So the gas velocities are also higher and much more opportunity to drag heavy ends out of the system and into the water heaters. They are also often closer to the bottles when mounted externally.
Can exhibit early symptoms in water heaters of fluctuating temperatures and difficulty for a gasfitter in setting and holding the minimum gas pressure in the commissioning process. Often by the time the problem gets picked up the oil has damaged the diaphragm of the proportional valve (the servo actuated adjusting pressure regulator in the gas valve).
I have extreme doubts that this is coming from phthalates in a particular customers individual installation. I have seen sufficient in some instances where the individual customer would not have had any hose left. This view is advanced by gas suppliers as it supports an "its not out fault" argument. It is not directly related to the ratio of Propane/Butane mix.
My understanding is that this issue is seen in large commercial installations where the customer has no such hoses and issues are greater because again velocities are much higher. Commercial customers can spend the money for specific oil removal systems where this isnt an option for domestic installations.
My belief is that the material builds up throughout the distribution system over time from all sorts of sources. The cure would be for 45 kg cylinders to be regularly completely emptied, inverted and drained/cleaned. My understanding is this happens rarely if ever.
Couple of suggestions:
1. The gas is not fit for purpose. There is no way the oil in the appliance has come from the customer's hoses that has the problem with the water heater. The fact that the gas supplier wants to claim it has got into the bottle from other customers with similar hoses is the problem of the gas supplier - not the customer. I expect any 45 kg cylinder other than a new one if inverted would have more oil come out of it than could possibly come from a single set of hoses.
Get the customer on the phone to the gas supplier and as far up the chain as they can get and have them on the phone work their way through "gas not fit for purpose" followed by the list of; disputes tribunal; fair go; MOBIE; Gas Industry Company; until the gas supplier blinks and pays up which in my experience they will.
Its a bit tough having a crack at the appliance supplier as it is a gas fired appliance not an oil fired one.
2. When you are installing LPG twinpack regulators make sure that you follow the code of practice and install a condensate drip leg. Try to get the customer to agree to regular service visits to drain. The challenge is that if they dont then at some point this really big reservoir of oil is likely to make the problem worse as it will potentially get picked up once the leg is full. Problem for a gasfitter is that if you dont install the traps in the first place then you could find yourself on the receiving end of the customer call when the gas company says no drip leg so not our fault.