When a anemone start to die, it will slowly deflat, like a ballon as it ages. When a anemone extends it's tentacles it is filling its' body with water. This is one of their defensive ablities; when startled the anemones expels the water enabling them to shrink into the protection of the rock they have attached to. Since the anemone body is a thin jelly like substance, when they die their body slowly "melts away" like ice cream on a hot day. All that is left is a puddle of gooy dead anemone.
The host algae is a microscopic animal called zooxanthellae. The anemone provides a home and protection for the zoos, and they manufacture food for the anemone. However, most if not all anemones need to be fed meaty foods such as krill and other yummy mixes of brine shrimp.
Anemones in the wild are more creamy brown instead of the stark white that you see in alot of fish stores. When salt tanks first became availalbe to the general public fish stores bleached anemones( this bleaching kills the host algae) because they thought it would look more appealing to their customers, some even tinted them with dyes to enhance their coloring. Unfortunately, for the anemones, these practices lead to certain death.
So if you ever see an anemone that look to bright to be real....don't buy it.
Do you have a better pic of your anemone???