Ron Natalie, the heating matt is not in the shower area though - so no water is reaching it. Do you mean the electricity may be traveling though the dry mortar? I guess it's either rip it all out or disconnect it permanently, if that's the case.

This is the product we used: http://www.lowes.com/pd_643504-70680-3708008111_1z0viqzZ1z11oi7__?productId=50339570&pl=1

The installation instructions do not say it needs to be taped on the edge - only if the mat needed to be cut, which it should not have, given the room size (mat was 90" and room size 109") but I will check.

https://www.youtube.com/watch?v=Y9Cp8bua2Eg

Water doesn't have to reach it. As I stated, mortar and grout IS conductive. I never said squat about it having to be within the shower.

OK, you said especially given a little moisture so I wanted to clarify the mat is not in the shower area. Anyway this mat did not require taping (unless trimmed to fit, which it was not) as it is sealed, as per the manufacturer instructions. The wires came attached to the mat and insulated. of course it's possible they were damaged during installation, but we'll have to check easier things first, like the thermostat and the wire behind it. The contractor is calling the manufacturer during their business hours to discuss what could be causing the issue.

That mat is leaking current.

Dang, sounds like pull up the tile or remove the thermostat, cap it off and abandon it.

I will wait to hear what the diagnosis is - basically either be that the thermostat and wiring to it is at fault and will be replaced, or as said the mat itself is leaking current either due to manufacturing defect or installation damage. If it's the mat I don't think we want to pull up the tile and replace, we'd likely elect to remove the thermostat cap off the wires and pretend it doesn't exist - because I don't want a huge mess in the house after we just cleaned up from the renovations (we did kitchen too) and think I could even trust a re-installation if the mat is so fragile. We will definitely will want a refund for the materials and installation costs, but it's going to be difficult to determine whether it's a defect or installation issue without ripping up the floor. I just wanted a warm floor underfoot :(

You don't happen to have an unfinished basement and this bathroom doesn't happen to be on the first floor does it? If so you can still have your heated floor. It is just a lot more work and money to install radiant floor heat although if the contractor screwed up installation you can take the refund and put it into that. Just a suggestion. I installed a heated floor in a heated bedroom a couple years ago with out an issue so don't be afraid of them. Sometimes things just happen. I would guess that the mat itself isn't the problem but the wiring attached to the matt got frayed or was incorrectly hooked up.

Update - it turns out that the mat does not have a ground wire, and the upstairs plumbing is not grounded. They tested when the heating mat is on there is not only current in the shower plumbing but also in the other bathroom plumbing and every metal fixture upstairs. No water needs to be present, they tested without running the shower. All downstairs plumbing is fine. They found there are ground wires on the copper pipes running to upstairs, but there must be some non conductive material in the walls (maybe a flex elbow they said). So grounding the upstairs plumbing is apparently step 1.

Any thoughts on this?

D G we are on slab foundation AND the bathroom is second floor.

I don't buy it. While metal water piping should be bonded (many people call it grounded), that doesn't explain why the heater is leaking current. In fact, having the water piping grounded will make things worse, not better.

Is there a GFCI installed as required on the floor matting. If you didn't cut the mat, what did he do with the extra set of cold leads? Did he make sure that there was nothing that could ding the mat? Did he wait the 28 days from installation to energizing the unit? Again DID HE BOTHER TO READ AND FOLLOWS THE INSTRUCTIONS?

Yes I agree with you the mat must be leaking current in order to
produce this effect. Unfortunately the cost of materials is so low compared to the cost of
installation. I imagine if we go further with the troubleshooting we
will reach a point where it's impossible to prove whether the mat is
defective or if it was damaged from install, without ripping the whole thing out. The contractor was present
when mat was installed and claims it was not damaged. The manufacturer
is unlikely to warranty anything without proof of that which would
presumably entail removing the floor. So that would mean we'd be paying a lot more for labor to have the issue diagnosed.

I think we want the contractor to
finish the kitchen work (install sink, DW hookup and backsplash) and then we'll have them cap off the system and abandon it. It's on its own breaker so it's not a risk right now.
I will not expect to be charged for the install, I can return the
thermostat and I'll be out $200 for the mat itself worst case scenario.
If I need to get an electrician in there to separately confirm that it's
most likely an install issue (ie if contractor charges me for install),
I will.
There were no extra leads, the mat came with the wires attached.

We turned on the floor about 7 days after install when we moved back in, no one instructed us otherwise. I did see in the instructions online later to wait 28 days. I figured that is to allow mortar to set avoid cracking etc, but I didn't see that info until I watched the video after getting the shock.

Lesson learned, if you want something like heated floor get an installer who has experience with the product.