Unfortunately I had probably about as much plastic-wrapped insulation
wrapped with e- tape as I could get on either side of the 2x4", and I'm
thinking its just condensation. Does condensation just happen if the (cold)
water is flowing? Maybe its not too bad. Maybe I can seal in the 2x4. Is
this possible? I mean, normal?

No it was 4-1/2 feet away, and already tubed in Styrofoam, taped, and
strung. I wrapped that in aluminum before wiring it up. It was pretty
tight up there.
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