Water Heaters - Can you shut off the cold water?

I have the aqua thermo iol furnace that runs with the water heater as well. The problem is that everytime I turn on the cold water I get a blast of hot water first. I went downstairs and above the water heater there are two lines running in one sais hot and the other cold. They both felt hot to me. I shut the one running in that said cold. Is this ok? will it solve the problem of the water being hot? I also run out of hot water very fast and I thought that maybe it was becuase the cold water runs into the hot tank. not sure though. Any advice would be great. Thanks!

ok so that did not work. I just discovered that I not have no hot water at all. I turned the cold back on and once again have hot water. I am very confused as to what I should do. I just don;t like to waste energy heating water that I want to be cold.