Good pics Phil!
I'm just curious... WAS that closet for the water heater to begin with?? & someone installed the panel there without knowledge of this? The plumber HAD to have been the last person here, obviously cared nothing that someone "might" need to work in the subpanel!

Also is that a "flying" splice on the left side of the water heater, about midpoint down? Not to mention what looks like 12/2 romex running this beast? what's the WH rated at? The lowboys are usually around 30A 240V... I can't imagine this being less! [Linked Image]

-Randy