What could be wrong with my flood damaged water heater?
Replace the thing, it's shot.  The lower thermostat if not the lower element's toast, and several other parts could have failed as well, in addition for the potential for waterlogged insulation causing...issues, especially if some foam-eating mold moves into it.

Oh, and your tank's likely to have started rusting from the outside in if the insulation has water in it, too.