OK, because your cover likely had water on it, it dispersed the water under it (pushed it up some) so it ran out the hole because of the "apparently higher" water level, thus the 1" difference between your opening and after filling.
3 inches in a week should be a relatively easy hole to find, it might look like a fingernail dent (half moon) - many turn out like that.
Also, look at that approximate level around the outside of the wall, you may have a small localized dent protruding from the wall where the cut might be if something hit it from the inside.