I was testing my new system last week, pumping 160ºF water from a kettle to my MLT and had problems losing prime frequently. It pumps perfectly with either hot or cold water with the burner off - it only failed with hot water in the kettle and the burner on. The kettle has a dip tube in it from the ball valve to the center of the kettle. I found that if I constantly stirred the kettle while pumping that I didn't lose prime even with the burner on. I could always reprime by simply turning off the pump and letting the water flow backwards for a couple of seconds - noticed a lot of bubbles coming out of the diptube almost immediately after turning off the pump, so I think they were in the diptube, the ball valve, or just outside the valve, but not in the pump. I'm speculating that it is cavitation - either sucking up steam bubbles from the bottom of the kettle, or maybe sucking up near boiling hot water right off the bottom of the kettle which turns to steam, maybe due to the Venturi effect as it goes through the narrow opening in the ball valve. I'm going to try another test this week without the dip tube and see if that solves the problem.
EDIT: Tested without the dip tube, only a coupling screwed onto the nipple inside the kettle, and had no problems. Pumped all the water (down to the top of the coupling) out several times and didn't lose prime a single time. Everything else was exactly as in the previous test above with the dip tube.