how do I repair my water damaged Ipod

Do not turn it on til dry. To dry:

How to fix a wet iPod or iPhone | eHow.com

Apple offers an out of warranty or not covered under the warranty "repair" price, which pays for an exchange at a discounted price off the full retail sales price.

The exchange will be the same model and storage capacity.

http://www.apple.com/support/ipod/service/prices/

You probably can't repair it yourself. You can try drying it out for a few days (put it in a sealed plastic bag with dry uncooked rice) and hope it fires up properly afterward. I've had success repairing other people's iOS devices that got wet that way, but it's a low probability of success which depends on how wet the device got, how long it was wet, which components got wet, how quickly it was turned off when it got wet, and how quickly the drying process began – not to mention the nature of the liquid (soda bad, water also bad just not as bad as soda).

Otherwise, the best you can do is go to your local Apple Store and throw yourself on the mercy of the Genius Bar. If you're lucky, they'll replace your iPod Touch for a fee that's lower than the price of a new unit. If you're not so lucky, they'll be sympathetic but won't offer you a break.

go to irevivespray.com and you have to get into your ipod and clean up the corrosin otherwise if you take it to an apple genius bar they could probably swap the ipod for about 99 they support products for up to 5 years.