What you are looking at is referred to as a major ulcer. The cause is generally bacteria entering the fish through parasite bites/punctures of the skin and then the bacterial infection rages on. The fish resting on the bottom of the pond, scraping against grit that has made it into the pond accelerates the erosion of the skin. Most of the major ulcers that I have seen have been on the belly of the fish, as is yours. Being down there, they are not easily visible until they have gone large.
You mentioned the breaching, and that is a classical sign of parasite attack, and would be a good reason for having a microscope to identify the parasites attacking the fish and begin treatment before it gets too bad. I am glad you provided test results which to me means you are trying to maintain a good environment for the fish.
Could this fish have been saved???? Maybe, but it would have taken a lot of effort, a separate isolation tank and months, so I think you did the right thing.
Zone 7 A/B
Keep your words sweet. You never know when you may have to eat them.
Richard