I have the flow going FROM the elbo TO the T with the element in it. I did it this way so I could mount the heater horizontal with it a little lower at the element to avoid an air pocket that would greatly shorten the element life, mounted in this way the element is always completely submerged even when the pump is shut off. the only draw back is the houseing will collect a small amount of glycerol so after draining your reactor of glycerol run the pump for a second or two to clear the housing. this is not my design but it is a great one that works well. the oil must be circulated through the heater while it is on or I don't know what will happen but it can't be good. I have my heater wired in with the pump so one will not run without the other. you're close I think element and all it might have been 40.00, I used all black steel pipe instead of galvanized..