Same thing happend to my Father-in-law as the original poster. Luckily his was in a basement. Not a fun sound to hear 40+ gallons flowing, with the water source still going as well.
tankless was not an option for the replacement, but he went with an all plastic or polybutene tank wrapped in...
billyM - sent you a PM with some questions about your build. feel free to reply here or via email/pm if you don't mind.
looking to do something very similar size/shape this summer. looks great so far, and very fast!
spentmiles