I absolutely hate this about water heaters at Home Depot. Several friends had this happen in Ohio. Then, installation required large fees for a city permit ($75) and other fees to install it. Warranties are shorter-term now than in previous years as well. I don't know how anyone can afford a home in 2010.
One friend paid big $$$ for a water heater, needed a new one within a year (under warranty) and that one went out in 7 months, Couldn't get a third one under the warranty. Must be really hard water or a heater made out of aluminum foil and soup cans. I hate cheap manufacturing.