For domestic hot water heating, there are a few ways to go. You don't need a big heat pump. A few ecorenovators have made heat pump water heaters out of dehumidifiers. Randen made one out of a 5kbtu air conditioner.
Never heard back about your existing unit. If it's got capillary tube metering, you can go with an expansion valve and get better cold climate performance. I just picked up two of them on eBay for about 20 dollars each shipped. What valve to use depends on your unit. Mine will be going into a 2 ton whole house window/wall ac unit that got its face melted in a kitchen accident.
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