What's wrong with this picture?

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Is it raining inside?

Looks like water following the service entrance cable or conduit from outside. Unfortunatly very common if things aren't sealed up properly.
 
how did they get a square d snap in breaker in a cutler hammer panel. I thought CH had a hook on the breaker and QO had feet?

The bus stabs are similar, the width of the CH & QO frame breakers are the same, the only difference is the way they attach to the rail. Not a example of good workmanship in the OP's photo, the rust is not very helpful either, before posting I did not look at photo #2, that panel is scrap metal.
 
Woo. I've seen rust and oxidation before, but that buildup in the bottom of the box is impressive.

What happens in the area this panel is mounted in?
 
My guess is water is running in via a raceway (may just be condensation water and not a leak) and following the conductors connected to those top few breakers to the breaker terminals. Just having a "drip loop" so to speak (conductor droops lower then the breaker terminal) would promote the water to flow to that point and drip off the conductor there, though sealing the raceway would keep condensation minimized in the first place.


The QO breaker in the CH panel - all that is needed for it to work is for the breaker jaw to attach to the bus, foot rail hooks, clamps - those can be bent, broken or removed :happyyes:
 
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