On our way out from the canals, they were getting bombarded by headcrab canisters and overwatch toops were moving in. What happened to it afterward? Heres my theory:
As the transport left with overwatch already shooting away, there were more headcrab canisters falling across the land. Overwatch knew the big transport was leaving but they didnt know that it would be the only one so we can assume they tried to bombard it as much as possible. This bombardment pretty much turned the canals into what Ravenholm is in HL2. All the refugees in the canals would either died of wounds or turned into zombies. In conclusion, the canals are a zombie infested wasteland with no survivors. Anyone who sets foot in the canals either gets eaten or zombified.
Thoughts on this?