I finally got around to pulling the bumper, it looks like the problem is definitely the ballast as I pulled the one from the other headlight and that fixed it. I bought a used ballast on ebay for 60 bucks so hopefully that does the trick.
I really couldn't see where water is getting into the headlight, it didn't leak out at any of the seams so I am at a loss. I may have to try and reseal it as a new headlight is 450 bucks!