Is this plumber's putty?
Plumber's putty is usually soft. If it is hard (you mentioned chiseling it off), it's more likely some sort of epoxy putty that someone used to try to repair a broken pipe, and those things rarely work for long. I would expect to find a broken drain line that was too far into the wall to fix easily, or an old pipe that was cut off too close to a fitting to be able to glue a new piece onto it, meaning you may have to open up this wall to get to it and fix it right. That patch job just delayed the inevitable, and that has now fallen on you...