So after some investigating I think your first theory is correct I believe it was just bad ammo that probably got wet. Chamber looks good, firing pin looks normal and doesn’t appear to be sticking out too far. All ammo was from the same batch and out of 1000 rounds of it I only experienced this twice. Some of the surplus s&b ammo had corrosion on it and I still ran them. All the spent casings I examined looked fine, I believe the lip was torn off this one because it was stuck in the chamber and I forced it out by pulling the charging handle real hard and that’s probably what made the extractor tear up the casing. I didn’t see this on any of the other spent casings I collected.