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With the heating element disconnected and the water heater electric heat switch on, you should get a reading of 110-120V across the wires that go to the heating element. With the element connected, I think you should get a very low voltage reading across the terminals since you are only reading the voltage drop across the element or across the circuit leading to the element. This could easily be near zero depending on what range you select on your volt meter.
I'm not sure why you get only 10V with the element disconnected, but I would start by checking the element itself. With the element disconnected, you should get a resistance reading across the terminals of the heater element. The resistance depends on the wattage of the heater, but I think it should be in the range of 10 ohms. If the resistance is near zero, then there is a short in the element. If the resistance is infinite, then the element is burned out.
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