Hi Mark
Sounds like you have a closed combustion chamber water heater... yes? If so, then that dripping could be a result of a leaking water heater (leaks when the flu expands), or it could be due to moisture that is simply inherent with combustion AND your combustion chamber is not getting "MAKE-UP AIR" like it needs... ;)
Let us know more about your water heater... brand name would sure help here, OK?
Of course, it could also be a boiler as Chuck indicated...
Let us know more...
Mark
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