The captain was asleep (passed out from overindulgence in alcohol, to be precise) and the mate, who didn't know the channel well, took a "shortcut" and drove her across the rocks. A friend of mine, who worked for the shipyard that repaired her, said that you could have fit his 3-bedroom HOUSE in the hole in the hull.

The Capital Steps did a great send up on this, to the tune of "Feliz Navidad" -- I can only remember a little bit:

Valdez hit the rock
Valdez cause a shock...

Alex