Whale 11gal water heater engine coolant loop corrosion

[Ruso]

Guys,
May be you can advise me on it.
The boat was on hard for 1.5 years before I bought her.
The heater tank is 3 years old. Electric part is working.
Noticed (surveyor missed it) the engine heater loop is clogged (no coolant flow)
Removed hoses from intake-outtake pipes. Heavily corroded - white powder (aluminum oxide?). To degree I had to use rigging wire to stick it through inside the pipes going into the tank.
Cut the corroded part out of pipes and it tested under shore water pressure.
When I removed the tank cover and control panel cover later I noticed bolt and nut lying around not connecting Green Wire (ground?).
Anode during on hard was removed and water drained but not coolant.
Any idea what went wrong?
Was it grounding issue?
Many thanks