have you checked out: S-056539 in the solidworks KB? i think there is a post about this in the forum as well.
it sounds like you may have set a manual time step that is too large because my experience with these types of problems is that it requires a really small time step and really well defined mesh to make it work properly. if you are really new to flow simulation, I would start by going through the standard tutorials to get a hang for the software and then move onto this problem. i think the setup sounds reasonable but would need to dig into it further to know where things might not be working.
Thanks Jared. How did you guess...this was the first problem that I've had to work on using flow...at least they gave me an easy one
You are correct about the time step; I had been using 0.01 s which according to the KB doc needs to be in the range of 1e-7 s. I think it really comes down to the fact that the characteristic time for wave propagation is so much smaller than that of the tank filling process.
There's also additional explanation in the flow help index under "tank evacuation" for reference if anyone else is interested. Thanks again.