I suspect you have more than one problem; you may have had a bad neutral for some time and not realized it. Then the second problem cropped up and exposed the first. The reason I say this is I can't come up with a decent explanation for why turning off your water heater also kills the lights that doesn't involve two faults.
Troubleshooting starts at the beginning. In this case the main disconnect for your house, which is either at the meter or the main breaker panel. Turn off the main. Read all the voltages at the meter side of the disconnect: Hot to neutral (both legs) and hot to ground. All should be 120V. Hot to hot should be 240V. If you have any problems at this point, you need to call an electrician or your power company.
Now turn off all the loads on the panel and turn the main on. Check your voltages again on the load side of the main. If something is amiss here, you probably have a bad main disconnect breaker.
Now start turning on loads, verifying that the voltages remain good at the load side of the main (the buss bars). If a leg voltage starts dropping, you probably have a bad main disconnect. If you can get all the circuits turned on and the output of the main breaker is OK, then start checking the voltage from each breaker to neutral. I think you will have found something by this time.
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