Shelly 1 powered with 24 V DC - Gets timeout error when trying to include device

My Shelly 1 won't include in the Shelly app. The Shelly WiFi network appears briefly, but then inclusion is unsuccessful with a timeout error. The WiFi network list in my Android shows the Shelly network briefly, but it seems to disappear. My phone is right next to the Shelly.

The Shelly seems to have power as I can hear it clicking. Sometimes a double click and sometimes a single click, maybe every few seconds.

In case it's helpful, my Shelly is connected to the circuit board of my Reznor heater. The C wire is connected to the Shelly neutral, the R wire is connected to Shelly's line, and the W wire is connected to the Shelly SW. I want to use the Shelly to switch the heater on/off, which is achieved by completing the circuit of the R and W wires.

I have the Shelly 1 connected this way:

wrong.jpg

After researching, I realize this is probably wrong, and I think I need to connect it this way:

maybecorrect.JPG

Thermostat is removed because I really don't need it. The R/W circuit is what switches the heater on, and the C wire provides a return route for the 24 V DC power.

That said, I don't know if this would cause the original issue I was seeing, since the power is connected the same way in both diagrams.

Thanks for the quick reply! I'm confident the WiFi signal is strong. I am going to purchase a multimeter on the way home from work and measure the voltage this evening. Will report back!