From Ken Julien:

Wanted to share an experience I just had with my Ruud 40 Gallon Natural Gas Water Heater. We experienced no hot water and I checked out the water heater. There is a Honeywell Control on the unit that had a blue light blinking 7 times followed by 3 second pause. After some investigation I determined that this was an indication of a Flammable Vapor Sensor (FVS) fault on the unit. After doing some research on line I determined that either the sensor went bad or had sensed some flammable vapor. I realized that Lisa had just done some spray painting in the basement and that that might be the cause of the issue. I contacted Ruud Technical Support (800-432-8373) to determine how to reset the sensor. Here are the steps that I followed that resolved the issue without calling a plumber. Technical support was very helpful and I also registered my heater at the same time.

1. Turn the Honeywell Controller to the lowest setting
2. Turn the Honeywell Controller off using the on/off switch on the unit
3. Remove power to the water heater unit by unplugging cord going to outlet above the water heater
4. Wait 10 seconds.
5. Restore power by plugging in the cord above the unit
6. Within 30 seconds perform the following steps
7. Move the temperature control from the lowest to the highest level then back to the lowest level again
8. Repeat this 7 times.
9. On the 7^th time turn the control to the original setting (like hot)

This should restore the water heater to normal function unless the FVS is truly gone bad.