Water heater HALF full ?!?!???

[MichMich]

I have a natural gas 4 years old State Select Water heater with Honeywell controller box (I know there is a special name for it, but it's the box on the bottom where you can change temperature and also it has a light that blinks).
I also have a salt pallets water softener.
I've checked the water heater, from the outside and also checked the control light and it all looks OK.
The water softener is no issues as well.

My problem:
I've noticed in the last couple of weeks that:
- with the same amount of people in the house and with the same water usage patterns - we run out of hot water rather fast. It's like it's only 35% effective comparing with the previous 100%.

Do you know what the issue could be?

 

[voletl]

Could be a bad thermostat. Your dip tube could be broken. Your water heater could be full of sediment drastically reducing the amount of gallons of water can hold post a picture of what you got there

 

[MichMich]

With water softener, should the sediment issue be resolved?
And also, this heater is fairly new, I'm surprised it'd already break? But who knows?
Can't take pics now, kids asleep and no access to the attic... sorry.

 

[Geofd]

is it everywhere or just the shower???? B

 

[CT18]

It has to be the dip tube. Where in Michigan are you.

 

[MichMich]

Geaofd - entire house

CT18 I'm in TX, what is dip tube?

Water lasts for one bath (kids) and then goes lukewarm and then cold...

 

[voletl]

When cold water enters the water heater there is a long plastic tube that goes all the way to the bottom of the heater it forces the cold water to enter the heater at the bottom forcing the hot water up out the side if the dip tube has deteriorated or is broken Coldwater can simply flow in from the top and then exit the heater right away causing you to have luke warm or cold water

 

[MichMich]

When cold water enters the water heater there is a long plastic tube that goes all the way to the bottom of the heater it forces the cold water to enter the heater at the bottom forcing the hot water up out the side if the dip tube has deteriorated or is broken Coldwater can simply flow in from the top and then exit the heater right away causing you to have luke warm or cold water

Even when at first, for about one half-full bath tub, the water is HOT?

 

[CT-18]

Yes because the tube could have broken off halfway down not pushing the water at the bottom up.

 

[MichMich]

I guess lucky me, it's still under the Warranty:

100112448 K,DIP TUBE ASSEMBLY,W/GASKET 1/28/2019

Do you guys have any experience with State Select Warranty Dept.? Any tips on this?

Thanks!