The type of grounding electrode is irrelevant in this case-there are many code compliant ground electrodes that would have allowed this to happen. In fact, a metallic water or even gas connection shared with another home could have created issues in a second home. I was asked to upgrade a service in a home that had a near miss with a fire-15 amp breaker on a #14 wire almost caught fire. The breaker was fine. The problem turned out to be a bad neutral- the home was getting its neutral through the #14 to the furnace then through the gas line to other surrounding homes. All required grounding electrodes existed and were in good repair.
Normally, there will be warning signs. Lights dimming, or especially getting brighter ( though with new LEDs this probably won't be noticeable).