I have a 220v 10/3 wire with no ground just black, red, white (2 hots and a neutral) that used to run to an old oven that has since been replaced with gas unit. I want to run this wire to a water heater so I only need 10/2 with ground. The panel box is older with neutrals and grounds sharing one bar. Can I use the neutral wire as a ground and mark it on both ends as such?
You can reuse it. Either strip the insulation off or just re tape it green (I know technically not allowed to remark smaller wires). Move the neutral wire to the ground buss, tape or strip and call it a day.
Since your only reallocating the red or black as a ground, just re identify using a permanent method (aka green tape over the visible portion in the panel and at the water heater one you change to the ground bar, see article 250 of nec for any additional questions on ground identification) then as long as 90.3 the authority having jurisdiction doesn't have a problem with it, you are good to go.
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