(For the record: Goldy has done a fine job keeping Slog up on the latest developments in this crisis—closely following the available news sources, and accurately relaying what's being told to the public. If you're looking for a true hysteric, I'd suggest the EU energy chief declaring this situation the 'apocalypse'. No horsemen in sight, from where I sit.)
Earlier today, a fire was reported to be burning in Reactor 4—the second fire at this site. At the time of the earthquake, this reactor was shut down for maintenance, with all of its fuel stored in a nearby pool of water.
Let's talk about these pools of water. The fuel rods at nuclear power plants—both fresh and 'used' fuel rods—produce large amounts of gamma radiation. Water is an excellent shield for gamma radiation. In order to protect the workers at the plant as they load and unload the fuel from the reactor, the rods are always (supposed) to be bathed in a deep pool of water. Think of a really deep swimming pool, open to the air above. The workers can operate cranes and other machinery safe from the radiation produced from the rods below—thanks to the shielding provided by the water. The water can also double as coolant for the heat generated by the decay of the unstable atoms within the fuel rods. It's an elegant solution to the problem: Water is clear, plentiful, not-too-viscous, with high-thermal density and non-toxic.
The pools were initially designed to have enough water in them to be able to dissipate the heat generated the by the rods with no need for active cooling. Enough heat could be radiated off the top of the pool to keep the water from every boiling away.
The problem starts with the lack of any sort of permanent nuclear waste repository. The initial plan for plants like these were to ship off the spent fuel rods to this (now mythical) waste site, freeing up space for new fuel and freshly spent rods. With nowhere to send the waste, the backup plan was to store more fuel on site, in these pools, by packing them tighter with the fuel rods. By this point—with the increased number of rods stored in the pool—the heat generated by the rods cannot be completely eliminated by passive cooling. If the cooling pumps—that replace the water warmed by the rods with cold water—fail, the water in the pool gradually heats up, eventually boiling away.
This is what has happened at Fukushima over the past day or so—almost certainly in the storage pool for Reactor 4 (stuffed with all of the waste fuel, plus fuel that normally is within the reactor), and possibly the waste pools for the other reactors. These pools were within the (now destroyed) 'secondary containment' building, now are exposed to the air.
As the water boils off, the gamma radiation from the fuel rods is no longer being shielded—making the plant deadly to work in for any length of time. Further, the steam from the boiling water is (partially) broken into oxygen and (explosive) hydrogen, leading to further chemical explosions that have damaged the plant. Finally, these storage pools—once the roof of the buildings were blown off—are exposed to the environment. Any steam (to hydrogen) explosion will result in radioactive waste being propelled into the air—and spread. The waste fuel stored in these pools contains the most worrisome environmental contaminants—radioactive Iodine, Cesium and Strontium that can replace non-radioactive Iodine, Potassium and Calcium respectively.
Arguably, this is a worse situation than a reactor meltdown. At least in a reactor meltdown (in which the fuel rods within the reactor melt and lose their shape) the radioactive slag heap is within the heavily reenforced reactor vessel. The unshielded radiation limits approach to the pools—to repair cooling systems or to refill them with water. The plan now (apparently) is to use shielded military helicopters to drop water onto the pools. It's a grim situation—without a clear, clean solution.