I have a stainless sidearm 3/4" line inside a 2" pipe (I think) supply is a 1" line coming straight from my owb approx 40' away. Hot from owb goes in the top of the sidearm, heater is set up to thermosiphon and we have a mixer valve installed. I connected the sidearm into the top side of the heater using a T for the pressure relief valve. Owb is set to 155*. It works really well and we haven't had any issues with running out of water. If you are running out of water maybe something isn't setup right. Did it ever work right?
I assume he means that he has his sidearm connected to the pump instead of thermosiphon to move the hot water.
You can turn your breaker back on, it won't hurt anything. Some peope still leave their electrical hooked up they just drop it a few degrees so that the owb does most of the heating, the electricity is just a backup or for quicker recovery when using a lot of hot water. I have a 20 plate exchanger on my other house and it works good too, the more water you use the hotter it gets. ( mixer valve keeps water temperature from scalding though.