I have a gas water heater built in 2007. The cold water supply won't turn off. Flushed the unit, burner and pilot fine. Called company (AO Smith) and they said I have a leak somewhere. However, the water meter is not turning. My question is where is the water from the tank going? I do not see evidence outside anywhere.

Could there be a blockage in your cold water supply? Maybe water isn't even getting into your hot water heater.

When you flushed the heater was the water that came out hot? It should have been. Did the burner come on while your were flushing the heater? It should have. When you flushed the heater did the water come out under pressure just like at a faucet?

When you flush a water heater you do it with the cold water input valve open and let the water pressure "flush" out the sediment in the tank. When you drain a water heater, you close the cold water input valve, open a faucet so air can get in and let the water in the tank drain out. Sometimes the cold water input valve will not completely shut off the cold water coming in completely because the washer in the valve has deteriorated. You flush with the cold water valve open.

What, exactly do you mean, "Water in hot water heater won't heat."? Does that mean you have absolutely no hot water or does it mean you have only a very little hot water? Any leak will not be outside, that is unless you have hot water going to another building.

You said the burner and pilot are fine. I assume that you mean that the pilot light is lit and the burner comes on periodically.

Good questions from Harold. You have 2 issues. We should fix the valve first. Do you have a main shut off for the home that totally shutd off all water to the heater and cold lines?