Canoman,
I'm actually more confused by your second post. Based on your description of only one valve blocked (water exit), I would suspect you don't have a thermal relief case if your cooling water supply is a typical distribution header type system. As you noted, water will just expand out through the inlet connection but at a pressure only "slightly greater" than supply pressure and you shouldn't even be close to relief pressure.
Now, if your exchanger is equipped with a "thermal relief valve", I suspect you have an exit and inlet water valve or something else in the inlet that's going to prevent flow out of the exchanger (check valve, control valve) and I really think you should be looking at the situation as if the exchanger water side is liquid full and both exit and inlet are blocked. In other words, there is no other relief path except through your relief system.
Okay, going back to your original question, based on your relief valve set pressure same as your equipment limiting pressure, I think vaporization needs to be considered since your hot side temperature (342F) is greater than the boiling point temperature of your water at maximum pressure allowed for your water side (about 326F at 82.5 psig). API RP-521 has a section titled "3.14 Hydraulic Expansion" that gives some guidance about situations where the blocked in fluid vapor pressure is greater than the relief design pressure and you should review that section. But at 342F, worst case water side vapor pressure is about 107 psig which is questionable as being an acceptable condition even from a hydrotest pressure standpoint on the water side.
For a liquid full system that is blocked in, as the cooling water temperature initially increases, you will need to provide relief for the expanding liquid. When the water temperature reaches the boiling point at relieving pressure, the liquid will begin to vaporize and for a pure component, at constant temperature until all liquid is vaporized. The formation of vapor will require additional considerations.
You should also think about how your relief valve is connected to your system. If it is connected low in your system so it is always below a liquid level, you should check your system to be adequate for not only a liquid expansion rate but also for a liquid rate equal to the rate of vapor generated. In the latter case, vapor can't get to the relief valve until all the liquid is pushed out of the way. Furthermore, in the latter case, you will be relieving a liquid at its bubble point which will likely flash in, and downstream of, your relief valve.
If your relief valve is located at a high point, you "could" take the approach that your relief system needs to be initially adequate for the liquid expansion rate and then eventually for a vapor rate equal to the rate of vapor generated. However, you may not always be willing to accept this approach. Before taking this approach, I would suggest you review the section in API RP-521 "3.15.3 Fluids To Be Relieved". This section actually falls under the "3.15 External Fire" section but I think gives reasonable advice for a liquid full system such as yours.
As far as determining the rate of vaporization, you could use Q = U * A * dT to determine heat input along with the latent heat of the cooling water. I think it would be safe to use the clean, overall heat transfer coefficient from your exchanger design and the exchanger area. Most likely for a blocked in situation on the cooling water side the actual "U" will be less. The temperature difference is the hot side temperature to cold side vaporizing temp.