My plumber did install a 1/2 recirc line to the point of the farthest fixture which is connected to the tan recirc pump shown in the pictures which gives the effect of the tank as you describe. As I understand it, this would just cut down on the delay experienced for the initial damand for hot water. This pump works as you describe - every 10 minutes it comes on for 90 seconds.
I had tried closing the valves, basically eliminating this from the loop, to determine whether the cold water I was experiencing was just what was trapped in that line. Unfortunately this did not eliminate the problem.
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