My "Milkhouse" heater did the same exact thing.
Mine was an older Milkhouse heater. The wire/cord became brittle over the years and a couple of cracks developed on the plastic coating of wire that plugs into outlet.
I used it for years in same place. This fall it worked sometimes. Then stopped working. I thought that the heater was broken. When I looked at plug (behind desk) I viewed same as picture above.
I cut cord/wire and put new plug on heater and it works fine. But it is now in storage as I purchased a new one.
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