Hi. My 2 year old daughter dropped my iPhone in the toilet (clean water thankfully!). Anyway, like an idiot I tried to use it while it was wet and the screen shorted out, blinked erratically a few times and the light stopped working. I let it dry out a little and the screen turned on and flickered, but still no backlight. At this point it would only work in speakerphone mode and not very well. Also, there was visible water behind the camera window.
I use my phone for work (i'm on call 24/7) so I needed to get a new one (so I thought). I rushed to the Apple store and got a 3gs after the genius verified that one (the bottom) water indicator was red and I thought it was hopeless to think the phone would be usable again. New iPhone purchased and activated I went home and thought of something.
Just for the heck of it, and with nothing to lose, I placed the still wet iPhone in two socks, put the socks in a towel and put a bungee cord around the whole thing. I put it on low heat for about 30 mins and took the phone out. It looked dry and the water behind the lens was gone. I turned it on...
it worked perfectly. The screen, the backlight, the microphone, the speaker, the camera..everything worked flawlessly. I went back to the Apple store 5 days later to return the 3gs and we swapped sim cards (according to AT&T rep's instructions). There was no restocking fee, no activation fee imposed, etc.
That was a month ago. The phone is STILL like it's brand new out of the box, save for the tripped water indicator and no more warranty.
Just thought I'd share that with you.
Good Luck!!
Rob