Close call (fire) with water heater

Back from the mountains after a short trip with the family in which we had a bit of a scare the first evening.

Pulled into camp with our 2016 Keystone and turned on the propane side of the Atwood 6 gallon gas/electric water heater (model GC6AA-10E). In hindsight, it immediately it had an unusual odor. Within about 20 minutes, the flip-down door had black char covering the exhaust grate and there was a dark tint to the trailer paint just above. The pressure relief valve was dripping, too, which it usually does not do. Upon seeing all of this, I flipped the gas switch off and we left it off the rest of the trip.

I initially thought I’d heated an empty tank, but it still had water from the previous weekend’s trip. Plus, the valve was dripping and a normal stream of water shot out when I pulled the valve handle. Then I wondered if it was just something like a wasp’s nest that was burning. That, to me, though, doesn’t explain the water inside heating to the point that it caused the valve to drip.

Any suggestions as to what might have happened?

We’ve got some good RV shops in town, but they’re incredibly expensive. If it’s something I can test and potentially fix myself, I would like to explore that route first.

Thanks!