Was recently called to inspect a hot water tank for a insurance claim and I always heard it could happen but for the first time in my 45 plus years in the field I actually got to see one .
The tank in pictures as you can see has its pipes bent and fittings around tank are melted .
The tank actually collapsed in on it self shutting off the top vent and sending Carbon Monoxide directly into the basement.
Had the lady who owns home not heard the strange noise and gotten the strange smell checked by gas company the CO could have killed her and the tank could explode violently .
The reason this can happen is
1# the small air buffer tank next to hot water tank fills up not providing a buffer and building up pressure on tank
2# the high pressure reief valve failing to blowon a pressure increase from street.
3# failure to clean the dirt and crap out of bottom of tank and it builds up.
This is one lucky lady.