I agree, heat shrink is NOT water tight... I had a simular experience, my large puffer chewed through the cable in 2 spots... I lopped it off clean at the spot it chewed thru closest to the pump eliminating the need to fix both spots... then, I purchased a matchingga. of wire from the hardware store that could be submerged. and a new plug for the cord and a section of FARM milking hose from my local diy/farm supply store. This hose is VERY flexible, and clear, and non - crush (also has a very thick wall). I also bought a tube of aquarium silicone, I conducted my repair, then slid the hose over the repaired spot, (atleast 5" past on both sides of the repair) then I squeezed silcone into the hose from both sides. I only did one side at a time, so the silicone could dry, and I filled deepest working my way out... gave it several days to dry, and it worked/works fine...
Otherwise, mag18's could be run external... proly beter for not transferring all that heat to the tank water anyway... I'd save the money and just replace the seal and inspect the impeller.
depending on how it was pack, this could have just been caused bu the pump housing impacting the power cord... I work at a tool company and we see this a couple times a year.
J