The Flood was a massacre perpetrated by agents of Serrin.
For a long time Welltower had the exclusive ability to manufacture light globes, and sold them only to Alizon. This made Serrin leadership understandably nervous; the two nations were in a cold war, and Alizon's technology was far superior to Serrin's.
Fearing their own destruction and greedy to obtain Alizon land and technology, Serrin leadership began putting together undercover deals with Aer and Chell. These men would develop missile guidance technology in secret for Serrin. Aer was determined to sell his technology to both Serrin and Alizon, feeding an arms race and enriching himself.
In the same year that Kaehl escaped from Welltower, things came to a head. Serrin resolved to kidnap Aer and his father to force them to work exclusively for Serrin. Chell abandoned his post as an assistant administrator in Welltower. The facilitate all this, Serrin needed a distraction. They chose to blow a hole in the aquifer on level 437. This let to a huge flood causing unbelievable damage to Welltower.
Shortly after these events the Rebound War came to a close as the Aers were rescued, Serrin's missile deflected, and Serrin itself annihilated in the feedback from Alizon's self-defense.
Effect on Welltower
The Flood nearly destroyed Welltower forever. The lower third of Welltower (everything below level 688) was completely submerged. Thousands of people drowned immediately, including nearly the entire leadership of Welltower (except for Mister Jolley). Many of Welltower's energy exchange globes were destroyed, causing the structure to overheat massively. Thousands more people were killed in the following days due to excessive temperatures, power failure, and unavailability of food and clean water.
Reaction from Alizon
Representatives from Alizon, especially Doctor Herstand and Longiver, responded to the crisis by ordering an immediate evacuation of every inhabitant of Welltower. A massive days-long effort was made involving many troops and continuous dangerous aircar trips into the Shaft to rescue as many people as possible. Once outside the Well, refugees were given food, water, shelter, educations, and offered a permanent place in Alizon. Most of the former Welltower inhabitants agreed; a few chose to return to Welltower once its condition had stabilized.
Alizon made efforts to restore Welltower to its former condition, once the water had drained.