A similar thing happened at a relatives' house, a long disused storage space under a deck needed to be cleaned and whatever natural forces were at work had accumulated enough new dirt to actually bury items stored under there (a similar array of items, since no one had played with the children's stuff and a few old chairs and such had been thrown there).

It's a lot of work to dig a hole large enough for a water heater, I wouldn't be surprised if something similar happened (I probably would have also checked inside the water heater since if you wanted to bury something and keep it dry one might consider a water heater tank as a possible container, not sure it actually works but it's a natural idea).