It is the sediment in the bottom of the tank. When water heats it causes it to bubble and the sediment is causing it to be larger than normal bubble hence the thumping sound. On electric heater you can take out the bottom element and clean it our using a shop vac. Commercial gas heaters have an access panel that is for cleaning them out. Might look but I doubt your 40 gallon household heater has an access panel.
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Today's Featured Article - An Old-Time Tractor Demonstration - by Kim Pratt. Sam was born in rural Kansas in 1926. His dad was a hard-working farmer and the children worked hard everyday to help ends meet. In the rural area he grew up in, the highlight of the week was Saturday when many people took a break from their work to go to town. It was on one such Saturday in the early 1940's when Sam was 16 years old that he ended up in Dennison, Kansas to watch a demonstration of a new tractor being put on by a local dealer. It was an Allis-Chalmers tractor dealership,
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