"Water heater case was rusted through near the drain, and there was rust around the pipes and other case openings. I suspect it was venting in the space between the tank and the case, and combustion byproducts were leaking into the room. Recommend water heater be replaced as soon as possible by a competent, certified, and insured plumber.
Byproducts of natural gas combustion include carbon monoxide, a poisonous, colorless, tasteless, odorless gas that can be lethal. The condition of this water heater indicates that these gases are not being expelled properly, and need attention now."
It looks to me like the flue inside the heater is blocked somehow. I couldn’t see anything inside the chamber, but it looks to me like the exhaust is travelling in the insulation space between the tank and the case.
Agree/disagree? Opinions on write-up?