jack wrote:
I am installing a 120v water heater in a 208/120 breaker box. Oddly,
there are no knockouts. Is that common in 208/120v?

I see three options; your advice on their legality would be
appreciated.
1) I can cut a hole with a hole saw. Not a pleasant chore, but
possible.

Why do you say that? A metal-cutting hole-saw should do the job in less than
two minutes.