Both intake/out couplings corroded, I have not shut-off the water and drained the heater to allow removal of the corrosion (rust) because I would like to know what repair materials I should have on hand. Because of the extent of the damage I am prepared to solder or replace what-ever it may need but if I have to replace it I would be extremely disappointed, mea culpa, I should have noticed this shyte months, years ago. Thank you for taking a look!http://i1068.photobucket.com/albums/...1-10181756.jpghttp://i1068.photobucket.com/albums/...1-10181729.jpghttp://i1068.photobucket.com/albums/...1-10181716.jpg

Turn off electricity to the heater. Find source of leak. It may be only the nipple or the thread on water supply. In any case it does not look good at all. I would suggest to replace both nipples, both water supplies, clean and dry all rust and water and reactivate. Monitor it every day. If any water appears, shut it off immediately and replace. Back to you. Milo

Looks lke galvanic reaction to me. A dieelectric union should have been installed between that galvanized bib and the couple line, you have created a very small electric battery with this hook up. Welcome to the Applied Solutions Web Site!

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I would like to know what repair materials I should have on hand.

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Two 3/4"X 4" brass nipples, two 3/4" female adapters and Teflon Tape.
Cut out the old connections. Clean the areas with a wire brush, Teflon tape the threads on the nipples and thread them into the heater. Screw in the adapters and solder the pipes to the adapters and you're back in business. Good luck, Tom