How can I repair this damaged air compressor?
I'm not sure what the rod might have been, the inside of an air tank is pretty simple. 

Replacement drain valves are available in a variety of configurations, and generally they thread into a nut welded into the tank. It's then just a matter of finding an appropriate replacement valve (relatively easy) and removing the old one (probably much harder).



To help get the frozen valve out, you could (should) try penetrating oil to free what are almost certainly frozen threads, but you may need to step up to using a torch to apply heat to help break the part loose.