[Mikendebbie]

About 90% of the time we don't get hot water and when we do the flow last for only a few minutes. I went on YouTube and found only one video about a spider web in the venture. That is not my problem. So took the side panel off the water heater and voila hot water each and every time. Putting the side panel back on and once again no hot water.

If I understand correctly - the OP thinks the problem is an air intake problem.
The burner flame comes on when water flow is detected and water is heated and delivered, but then burner flame goes out and no hot water is delivered. He took the "basement" side panel off the water heater box and the flame burns good and hot water is delivered. Put the side panel back on - and burner flame goes out after initial fire.

I have and IW60 on my unit and I have not had this issue. Bourbon Country stated that the single vent must be /concentric both exhaust and air intake. I could not find documentation stating where the combustion air comes from - so his theory seems correct. But I would love to know from the engineers how the combustion air gets to the combustion chamber for my own curious future use if I have issues with mine someday.

I have never taken the side panel off my unit - but I believe these boxes are wide open inside (2 chambers split by a divider wall). Looking at the screen shot below from the service manual - what widget lives on the left side that may interfere with combustion with the side panel on or off? I highlited a couple of widgets - but I would suspect the thing that ChuckS showed in the post above - the electrode/flame probe might be defective.

I would check that flame thing before I started drilling holes in the case for more combustion air. My IW60 operates without holes in the case.