Did the water temperature on the display match the actual water temperature before replacing it? If so, I would install old
sensor back. I am not sure why you got such a high reading with new sensor. Since you are getting a heat light when you turn up the thermostat I don't think you have a flow issue or a tripped
high limit. What you would need to do is when the heat light is on and only if you are comfortable doing so you need to see if the
circuit board is suppling the heater with voltage using a volt meter. If the
heater operates on 220V then a reading across both hot leads is required, not one leg to ground. If no voltage is going to heater and heat light is on then I would think you have a issue with the circuit board.