In my '79 E29 a 6 gallon water heater is mounted on top of the fuel tank. The heater tank rests on a piece of plywood with cleats on the top and bottom that fit along the edges of the fuel tank and water heater to controll movement. There is also a wooden spacer between the water heater and inboard side of the lazerette that the heater is strapped to with nylon web. The spacer allows enough room between the water heater and the side of the lazerette for the engine exhaust and access to wiring.
I have been in heavy winds a few times and it hasn't moved nor have I seen any wear on the top of the fuel tank.
The water heater has a heat exchanger in it so you can use your engine coolant to heat water while underway if you have fresh water cooling. The hot coolant is routed from the engine thru the water heater and then to the heat exchanger.
Warning: the water is VERY hot, much hotter than found in a home water heater. My engine runs at 180 - 185 degrees. I always warn my crew to be careful of the hot water.
Getting the water heater into the lazerette is the biggest problem. The PO cut a piece of fiberglass from the outboard horizontal lip of the lazerette the width of the water heater tank to allow access. I don't think you could get the water heater in otherwise. I haven't experienced and leakage in the lazerette because of this. Cutting this has a very high "pucker factor". I am assuming all E29's have the same dimensions:unsure: .
Good luck with your project.