http://blogs.nature.com/news/thegreatbeyond/2011/03/fukushima_crisis_anatomy_of_a.html<snip>
When temperatures reached a few thousand degrees Celsius, the zirconium alloy holding the fuel pellets probably began to melt. As zirconium became molten, it reacted with the water and created hydrogen gas, which is highly volatile.
Operators may or may not have known what was happening when they decided to release some of the pressure from Unit 1 on Saturday. The hydrogen apparently caused a massive explosion which blew the roof off of the fuel hall, though the reactor's containment vessel appears to have remained in tact (see diagram, from NEI).
If, as it appears, the zirconium melted, then the uranium and plutonium pellets in the fuel rods may have begun to fall out loose into the pressure vessel. If this is the case, the cores of units 1 and 3 are now a volatile test tube filled with radioactive fuel, melted zirconium and water.
The real danger are those loose pellets. If enough fuel pellets are free inside the reactor, they could again gather to form a critical mass outside the fuel assembly. The loose fuel would restart the power-producing reactions, but in a completely uncontrolled way. This, if it happened would lead to a true nuclear meltdown.
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