Why is my water heater leaking from the overflow pipe?
The release valve at the top of the hot water heater has developed a leak or is starting to fail.That valve exists to release water because temperature and pressure are related linearly. When temperature goes up, pressure goes up.The release valve that should not normally leak on its own, but can be used to manually and deliberately release some pressure when the unit is being installed, maintenanced, or serviced and the temperature needs adjustment.Heed all the warnings written in other answers.If the valve is not damaged or faulty, the cause could be an unwanted increase in temperature due to the thermostat not working properly.In many cases, having that valve replaced may not be adequate in terms of function or safety and doing that as a DIY project is not advised. (I would never try that).Take note of the expected life or period of usefulness of hot water heaters. Many are rated for 6-years of use but of course keep on runnin’ till the release valve can’t handle the pressure anymore.The result is that the water will not heat up the the usual temperature before it starts gushing out of the release valve—and if the hose is not routed with piping directly over an open drain, there could be flooding.Some may notice before discovering any leaks that “this water is not getting hot like it used to,” and then they discover the leaking hot water heater (hopefully draining into a sewer drain or similar.
How to remove threaded pipe with a fitting on both sides?
That's what 'unions' are for. Threaded plumbing systems get assembled in order from one end to the other. To cut out and replace a piece in the middle you need to install a union, (joint) in the replacement pipe to get it in there. Do be careful about the final length. If one part of the system is corroded/leaking, the rest might not react too kindly to being over-stressed. Maybe you're 'in over your head' here?
Time for a new water heater?
The problems is cause by two dissimilar metals. From what I can see you have galvanized pipe coming out of the top of heater to copper. While it will work just fine. Over time the galvanized pipe though electrolysis the pipe actually breaks down from corrosion. And the thinnest part of the pipes is where the threads are cut. I would replace the pipe with schedule 80 black pipe or all copper. The threads have probably started to rot out over the past 11 years. And basically you have a seepage leak at the base threads where it screwed into the water heater. The crusty stuff is deposits (calcium / rust ) hence what you are seeing. At somepoint it may leak. Replace the pipes and you should be fine. Your going to need a pipe wrench to remove these and some pipe dope for re-install. The heater is probably fine. But most hot water heaters generally last 10 years and typically the inner tank fails at the bottom. Once she leaks out the bottom it trash.
Cut off plastic top of water heater inlet. Did I ruin the heater?
Wow, I'm surprised at the variety of answers you've received so far. Don't worry, you didn't break the water heater. Just use a pipe wrench to remove the short nipple and replace it with a 3/4" x 3" galvanized one. The plastic inserts are not there to "prevent metal to metal contact". (Since the female threads of the supply line connect to the male threads of the pipe, you will have contact). The plastic inserts hold a "flow restrictor", designed to keep the hot water from rising (as hot water does naturally), thereby saving energy. Since there is also a flow restrictor on the hot side, don't worry about it. As far as them being a suitable union for dissimilar metals, THEY ARE NOT. If you're connecting galvanized to copper, you'll need a dialectric union. Whoops, wait a second, you're talking about the cold side. You were right, that plastic insert goes "straight into the tank", as a matter of fact, it's called a "dip tube" and it sends the cold water to the bottom of the tank to be heated. Without it, you'll never get much hot water, since the hot water comes from the top of the tank. The cold water coming in will make your showers warm and your baths cold. That plastic is factory sealed to the pipe. If it's still held in place, you're ok. Just smooth off the top of the pipe and finish the install. If it looks like it may fall into the tank, get a replacement from Maytag or your local plumbing supply. These are not sold at Home Depot. You may need to flush any little pieces of plastic out of the heater before you put it into service, otherwise, they could clog your faucets.