I believe the one out of the head is the "out" as well. I did this two
years ago. A word of warning; my heat exchanger was pre-plumbed with
barbs for a smaller diameter hose than the perkins coolant hose. I
believe the lower flow rate may have adverse effects in cooling the
engine. My boat was intalled with a by-pass and a cock, which I can
fully open to allow full water flow through the water heater system.
When the cock is closed (all coolant is diverted through the water
heater), the engine keeps a higher temperature. Usually, I keep it
"cracked" or open. Of course, remember that you will have to bleed
the coolant system every time you play with those hoses if your water
heater is installed higher than the engine.

mickey