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When opening a .mxd in ArcGIS/ArcMap that had a WaterGEMS, SewerGEMS or HAMMER model attached, the model is no longer associated. If the model is added to the .mxd again, then duplicate layers are created.
This behavior is common when the files are moved to a new location.
ArcGIS has historically stored the "absolute" path to data sources in the .mxd file. Meaning, when you open a .mxd file, it looks for all the associated layers in the exact original path that they were saved in. This applies to other layers you may have added, not just WaterGEMS layers. So, if you move the .mxd file, WaterGEMS model files, geodatabase, and other layers you had to a new location and try to open it, it won't be able to load any of those layers, because they're referring to the old path. This is why you see red exclamation points next to all the layers in the table of contents. In short, the problems you're having with moving projects are due to ArcGIS limitations, which WaterGEMS has no control over. With that being said, recent versions of ArcGIS have added the ability to use the "relative" path. This way, it will look for the other data sources in the same folder as the .mxd file. In ArcGIS 9.3.1, this option is under File > Document Properties > Data Source Options. In ArcGIS version 10.X, this is under File > Map Document Properties > "store relative pathnames to data sources". So, you would simply need to have this option checked before moving the files to the new location.
To make a copy (to "save-as") of a WaterGEMS/SewerGEMS/HAMMER for ArcMap project, ensure that the ArcMap .MXD file is set to use "relative paths", and manually adjust the path to the hydraulic model file:
See details in this article: How to "save as" or copy a project in the ArcMap environment
WaterGEMS For ArcGIS [FAQ]