There are venting instant propane heaters but they are too large to fit in vanity of many heads. Even these vented units did not satify the underwriters and I am not shy about pushing an agenda. I would add that the Paloma I was forced to remove is still legal (by others' posts) on the other side of the pond.
Most boats, including mine, have plenty of ventilation in the head, so I was not worried about safety and would have kept the unit. I confess I was glad to get rid of the additional propane lines which ran behind everything as well as in the bilge and so were hard to inspect.
I have also heard of folks mounting them topsides.
The AquaTemp - all in - was 3K
"We have met the enemy and he is us." - Walt Kelly's Pogo