It appears that the thermostat is not completely shutting off the gas to the burner although the flame was much smaller then when the thermostat called for heat the water continues to heat. Would this be a thermostat problem or a gas valve issue and if so I am better to repair or replace this 6 year old heater.

Water heaters has a high limit switch with a thermostat probe that activates and shuts off the pilot when it exceeds that max temperature of 210 degrees only. When thermostat probe is wrapped up in lime and calcium, the pilot wouldn't even be lit also.
Majority of water heaters with t&p valves are set between 125-150psi well above city water pressure of 55-80, so it wouldn't be the pressure. So I would recommend replacing the relief valve and if it does it again then replace water heater. Most importantly t&p valves should be terminated where it is noticeable

Kimbah, You said, "It appears that the thermostat is not completly shutting off the gas to the burner although the flame was much smaller then when the thermostat called for heat the water continues to heat".

If this is truly the case then you have an issue with the gas valve and that will need to be replaced... wouldn't recommend replacing the entire unit over this. By the way, the gas valve and thermostat are the same for a gas water heater... ;)

At the same time, as recommended by Argaiu1017, replace the T&P valve for best result.

If the heater is actually cycling correctly and you do not have larger/smaller flame issues then you may just be able to replace the T&P valve, but the way you described above suggests the issue is a defective gas valve.

Please tell us more here so we can narrow this down a bit more, OK?

Mark