Is this water heater condensation or leak?

Question

Thanks in advance for reading this and helping me out a bit, as I am not sure if our water boiler needs to be replaced.

We have a AO Smith natural gas water heater that is about 14 years old. During the past couple of months, we noticed that the pilot light would go out approximately every two days. Thinking it may have been a thermocouple issue, I took out the burner assembly and replaced the thermocouple about a month ago, during which I noticed that the burner assembly was wet. However, the pilot light continued to go out after about two days after turning it on.

Just today, I took out the burner assembly again in an attempt to replace the thermocouple, and again noticed that the burner assembly was wet and rusted. I then noticed that the top of the burner chamber next to the vent hole was wet. Over the course of the day, the wet area slowly got larger.

Note that the pilot light went off at midnight the day before so it was about early afternoon the next day when I took these photos.

Do I have a leak here, or is it a condensate issue?

Here is the burner assembly when I took it out.

Here is a picture of the top of the burner chamber.

Answer 1

The picture of the top of the chamber appears to show that condensate in the flue would drip off the inner pipe, which projects slightly below the bottom shell, so water appearing outside that has got to be a leak.

Also, the pipe itself appears to be dry from that picture. Which again suggests a leak.

And more than 12 hours after the pilot went out, any condensation in the flue should have long-since been dried.