Rheem and Marey tankless are both available on ebay at sensible prices. It looks like both have stainless chambers which should eliminate the corrosion problems associated with tank units.

Anyone care to comment from experience with either of these brands? Other recommendations?

Marathon Plastic Tank
 

Your layout couldn't be worse.

No matter how you slice it, whether you leave it as it is, or use small axillary tanks, or use under-sink point-of-use heaters, or recirc systems, you will be paying a premium for your bad layout forever.

Your most frequently used (not highest volume) tap is going to take the greatest toll on your wallet. The killer tap is at the kitchen sink, that is if you cook and eat at home.

You should center your water heater around that tap.

I think you have made the mistake of falling in love with your idea of a mechanical room.

The mechanical room should solve problems, not make bigger problems that extend out into the foreseeable future.

-AC