Frequent topic on many a forum since ferro rods came on the scene, but I've yet to read a conclusive, well-supported answer. Furthermore, the phenom you describe seems to happen randomly. Its been called rust, oxidation and corrosion. Whatever, it can destroy a rod.
Anecdotal evidence seems to point to humidity as the culprit, particularly when near salt water. Yet on UK-based forums (cited since nuphoria resides in UK), some have experienced, while others have had zero problems — in some cases, same product, same region, same storage method.
Here are the causes I've seen discussed. Who knows. Might be a combination.
Humidity
Direct exposure to water, particularly saltwater
Manufacturing defect
Reaction to other materials in the storage environment
Some say type of rod makes a difference, e.g. ferro rod vs. mischmetal rod (there is a difference; the mix of components)
In some cases, deterioration takes the form of gray/white powder — the rod turning to dust. Other times, small to large pitting occurs. Some people have been successful removing the dust with water, drying and coating the rod with clear fingernail polish or some other substance (oil, lacquer, Vaseline etc). And the condition doesn't return. Others have nuphoria'soutcome. The corrosion continues.
Why nuphoria's resumed corroding might be because surface cleaning didn't remove all, and the rod started corroding from within (strictly a WAG).
Some people coat their rod with clear nail polish immediately after acquiring, and never have a problem. I've never coated a rod and have never had a problem (some rods 6+ years-old). Worth noting, I live in Arizona where humidity is normally very low.
Others seal in a heat shrink tube. Not a fan, because doing so hides the rod's condition from view. Hate to need it under actual circumstances, only to find it's well on its way to becoming dust or badly pitted.