I've never seen this happen before.
The heating element appears to have melted its way through the wall of the pot and is protruding about 3/8". It still heats the lead, but was causing some sort of weird contamination. The pot and the ladle would quickly become coated with red crud (the pic shows AFTER I scraped off the red crud, which had been over 1/8" thick), and the melt would look and act funny.
No big complaints because I've used this pot hard and you could say that it's given me my money's worth.