Thx yes was going look around the control valve next. Looks to me that the tile has not been routinely maintained (sealed). So some aging and cracking in grout may have added to the problem. Been in the house two years with no visible issues with daily use, it looked perfect (e.g. no staining in bottom grout until suddenly now). This disscussion really makes me wonder about the way tubs are sealed to walls. A Silicon seal acting like a ~1/4" water dike trapping and holding water makes no sense. Seems to me that there should be a 1/2" gap under the wall backboard with current recommended water barrier behind extended 1/4" further overlapping the tub flange. And their should be engineered a flexible polymer strip to be inserted in the gap to seal between the tub ledge and the tile. It should have antimicrobials in it and be treated annually with an application of antimicrobial treatment. The invention could be a firm microbubble nondegradable polymer. And it should have a GoreTex film like property, where free water can't get across it, very little moisture is held so it dries quickly, and moisture settling behind the bottom tile can excape as water vapor. Slight permeability to the flexible material and a fused backing of the Goretex oriented towards the flange wall could accomplish this. It could have a thin flap on the back topside so it is installed along with the bottom tile and act as the standard 1/8" spacer below the bottom tile. Being flexible and supported from the back edge it could flex downward if the tub ledge moves downward when weight loaded, still helping block water entry. If the tub settles a little permanently, the permeable membrane would still help block transport water out of the gap. A spongy expandable sealed bubble like strip material would allow the most water blockage with flexing and also be best at preventing any air gap developing. Just an idea ... on my wish list.

It is MUCH cheaper to have a few pieces of hardwood added (your professional flooring refinisher can do this for you...for a fee of course) and the whole thing refinished than it is to lay new plywood and then lay new hardwood. A full sand and refinish = $5/sf. That is the average cost. That includes labour and materials. If you need to source some pieces of hardwood and then lace them into the existing floor, it will add a few hundred dollars to the overall job. Now compare that to BAD (low end piece-of-junk) engineered hardwood. You can purchase the hardwood for $4.99/sf (please don't....they aren't worth the "savings") and then you will spend $2-$3/sf to install it...and that does NOT include new plywood (you can add another $2/sf for plywood+labour to install it). Refinish = $5/sf (plus a little more for new wood to be laced in) Add new engineered hardwood = $5 - $12/sf (floor itself) + labour ($2-$3/sf) + plywood.....a grand total of $9/sf - $17/sf. It's your call. The first thing you want to do is check to see how much wood is left on those old planks. Find a floor vent to look at the cross-section. Measure the amount of wood ABOVE the tongue. You will need 3mm of wood to get a full sand/refinish done. Start there. A sand/refinish is ALWAYS cheaper than new flooring. That's why solid hardwood is always more desirable. It can be CHEAPER to own over it's life time (60-80 years) than any other floor.

It doesn’t look level in the hole? Or like the hole was cut too large? You might want to do more investigating on that installation before you do anything. Does it have an access panel? That’s one thing that a lot of inspectors fail to catch, even though it’s required.

@live_wire_oak and @weedmeister thanks for the tip. Looks like the Costco installer was an amateur. I asked him the exact same question and he mentioned the grates will be aligned and not the top of the stove. He also never checked the level. I guess I will call them and ask if they can send someone more knowledgeable over. For the back it says 1inch gap is enough but who knows, looks like no one knows what they are doing anymore. Also, I am hoping that once I install the microwave on top the vent will be pretty good and quickly remove any heat. @wacokid yeah I wish I never asked the question about cooktop + wall oven below the cooktop (instead of raised in the wall) on Houzz. After hearing it is not a popular combo in the US, I decided to demolish my current setup and change. Big mistake! Thanks for the filler options @Shannon_WI.