I didn't mean to imply that the tank could explode..that's not where my concern comes from. I have witnessed BLEVE's (boiling liquid expanding vapor explosions) of large bulk tanks...it takes alot of heat for extended periods of time to create that scenerio. The risk of a fire from a propane gas leak is pretty high, especially when you consider that compression fittings on hoses, and even the o-ring on the regulator-to-tank connection could expand from being warmed by a heat source. Anything which causes internal movement of the components which are designed to create a seal while exposed to pressure (even from a low pressure regulator) could cause a leak. Heat expansion alone can cause minor leaks which could pass undetected considering you have a gas regulator which makes a slight noise, the burner control valve and the gas orifice causeing noise, and the gas exiting the burner plenum which makes a slight hissing sound. The faint hissing sound of a small gas leak could be masked by the normal operating sounds of the gas burner.
Even if you are diligent in checking for gas leaks on the tank connection with every use, and periodic leak checks down-stream from the tank all the way to the gas orifice, and everything between, temperature changes alone can bring out the worst in pressurized systems. I've worked in the petroleum industry for 28 years, and I've seen some things that would make the average person want to never play with fire.
I have had personal experience with a propane gas grill that was notorious for try to catch itself on fire due to downdrafts if wind hit the grill from the rear. Well, it finally did burn up the propane hose, and the resulting flame coming from the regulator hose could have turned things into a catastrophic event in just a few moments if the tank valve would have been in the line of fire, as it would have taken a fire extinguisher to put out the fire, instead of simply cranking the valve closed in rather quick fashion. This little fiasko happened with an OPD tank valve, so you can't rely on the excess flow valve to close just because there is an open ended hose or other high volume release. The regulator still has back-pressure against the tank valve if it is properly connected to the tank valve. If the regulator were struck by something and broke off of the tank valve or it's own stem on the connection, then, yes, I would expect the excess flow valve to close imediately.
The regulations behind the design of the OPD equipped tanks have good intentions, but the excess flow valves are not fool-proof in the sense that they will prevent any and all potentioal hazards from becoming incidents. The OPD (overfill protection device) contained in the portion of the valve which is inside the tank is nothing more than a means to stop flow of liquid into the tank during refilling when it reaches 80% of it's total liquid capacity, nothing more. And these are not 100% reliable either, as they are a mechanical device employing a simple float and rod which pushes a valve from open to closed position when the float is elevated by liquid reaching the tank's designed limit of liquid capacity. I've had brand new tanks not accept the first purge at a bulk supplier for it's first fill due to the OPD being stuck closed. The tanks had obviously been defective and was missed during final inspection before shipping to the source of sale. That's just a good example of quality control issues, and the lack of effective means to detect problems.
I do understand your delema about being stuck with tank exchanges, while I've always had the bulk distributors to get propane from, myself. It's a situation which has been created by far too many incompetent/unattentive persons refilling propane tanks, and the consumers being put against the wall because of the resulting problems. It would take some extra cash, a place to safely store them, and being able to safely haul them, but if you can get your hands on some spare tanks and get them filled at a bulk distributor while you are out for other errands, you'd be money ahead by doing so. I have 6 - 20lb tanks, live only 2 miles from the bulk distributor, and I rarely use more than 2 tanks at the same time.
The suppliers which are filling exchange propane tanks are taking people to the cleaners on prices, and with the increased costs of propane, they haven't been filling the tanks to the advertised/designed capacity for the past few years. The local exchange here is over 20 bucks, and it costs me around 11 bucks to fill a completely depleted tank. With the issues you're dealing with regarding water, I'd be raising royal hell if it were me. I might even make them aware of the fact that having water in the propane tank, and if there are signs of water present in the tank, is a liability to the company who fills the tank when it is tanks they return/refill repeatedly. Internal inspection via UL listed explosion-proof via mini-scope & light on flex cable through the valve opening of the tank would reveal the presence of water or corrosion with 100% certainty to the trained eye. And, any good fire dept detective skills will find signs of corrosion on the remains of a failed tank, even if it were involved in a fire. Pitting from corrosion is easily identifiable on metal surfaces, even if the rust itself were totally burned off from excessive heat.
Here's something that tops it all off: if there is water in the propane tank, the tank will begin to corrode from the inside out, with the most damage being in the center of the lower bulk-head of the cylinder, which is the lowest point (water is more than twice the weight of liquid propane). Propane tank failure due to corrosion while a high temp heat source, spark or flame is nearby could cause a severe and rapid fire, not to mention the launching of that propane tank in an unknown direction with a trail of burning propane behind it. Where will the tank land, or what will it strike? Who knows. Me? You? My house? Your house? Maybe a passing car or child riding a bicycle on the street? If you don't think that the company filling the tanks would send out a tank in this condition, where do you think the water in the tank came from? If it's been a recurring problem, and the source of your tanks is unchanged, then the same company that filled it is responsible for assuring that it can safely contain and dispense the propane fuel during normal storage and use. If they are allowing the tank to be refilled when water is present in the portable tank, their bulk propane system or refill hose and/or connections, do you think they are following any other necessary quality controls? I think not...
Good luck, Duane. I really do hope you can find a better source for your propane, because I would be seriously considering the possible consequenses of continuing with your current supplier. It just all sounds like a very bad situation on the horizon.
Eric