Note - expansion tank only over flows durring the timing when the hot
water is on.

So - the cold water feeder tank - that level should be quite high?

The big tank should be fairly high, but well below the overflow.

The small tank should be very low. Ensure that the valve only admits water
when the tank is approaching empty.

If these are OK already, then still suspect the heat exchanger. Weird stuff
can happen with pinhole leaks, which may only show themselves when certain
temperatures appear on the different sides of the exchanger. It can only get
worse, though, and may start leaking continuously.

Christian.