Plumbing – Location of water pressure regulator

Opening a drain valve downstream will not raise downstream pressure, it will increase flow and lower total system pressure.

If there is any flow the valve should close, as pressure above the diaphragm equalizes with supply pressure upon closing of the solenoid pilot port.

Get the brand and model # of the valve and order a rebuild kit for it as your problem is very likely to be mechanical. Turn off the supply and remove the valve bonnet, inspect and clean internal components (flush all ports to remove debris, check the diaphragm and support rings for damage or cracks, inspect the sealing surfaces and seats). Replace the washers and diaphragm with new ones from the rebuild kit.

We had similar issue with hot water heater. Went through three of them in 15 years. Plumber confirmed issue was related to thermal expansion. Consider getting a thermal expansion tank on the supply side of the water heater. If your water company installed a check valve on their side of the supply to the house, to eliminate backflow in to the city water suppy, your thermal expansion is stressing the holding tank in your water heater. That can compromise the tank integrity, causing leaks and flooding from a ruptured tank.