Last night we seemed to have extra hot water. This morning my wife had very little warm water, which depleted to no warm water, for her shower. I checked the water heater and found it off with a small amount of water present underneath and in casing. I hit the reset and it turned on. This was at about 8am. At about 10:30 am I checked again and the heater was still running, or making sound at the lower element. I ran hot water until the top element went on so I assumed it was the lower thermostat. I replaced the lower thermostat, made sure it was working by checking voltage. The upper thermostat pulls nothing when off, when I turn the thermostat all the way up, the element turns on and pulls voltage. All seems well on the top. The bottom however shows that the element is pulling juice when it should be off and it makes noise, electricity crackling noise. Then when I turn the new thermostat, (lower), all the way up, it clicks and the element pulls more electricity and you can here the element really running. Is my element electric connection shot possibly? It shouldn't be pulling any electricity or making any noise when the thermostat shuts it off should it? Thanks

There is an additional switch that makes the elements work one at a time, lower element first. However, if you found water both underneath the unit and water inside the jacket, you have a leaking tank. That may be causing electrical short circuit. Time to replace before you flood the house.

A short circuit makes sense. The guys at the local grovers or hardware/plumbing store says it is normal that that bottom element is not shutting down ever and that it is making noise continuously. That doesn't make sense to me. Even if it has power, 110 going to it, it shouldn't be running and making crackling noise continuosly. At some point it should shut off completely, right?

That is correct. I won't give my opinion the advice from the hardware store, just say check you bill, their math skills might not be any better.