I dropped my ipod touch 2nd gen in water too. I thought my ipod was done for. I left my Ipod alone sadly for about a month and one day decided to try and charge it. When I charged it, it started working I just had to connect it to itunes. If you do go to apple and they tell you that you have to replace anything, I will tell you that it is a lot cheaper to fix it yourself if you think you can. I've replace my audio jack, volume button, lcd and glass digitizer for about 30$.