iPod touch 4g defects..but won't replace free by the service provider

i've been to service center.. my ipod touch 4g is still under warranty because i got that only Last March 2012. The problem is that the volume button (particularly for the decreasing) is very sticky. see i've asked this question couple of months ago and majority says that i should take this to nearest service inquiry. Yes, the button is sticky.. although i could still press it, but it's very difficult and truly a discomfort. the next one is it has a screen defects but not cracks.. there is a shadow.. the ipod icon is left on the display no matter where i go even on apps. tried resetting it a gazillion times but it still remains there badly. i took it to the nearest apple center and talk to a personnel and try to explain things about my problem. he just examined the 3.5 mm jack and says i could no longer replace the device free because according to him, the metallic thing inside has discolorated which indicates that it got wet already.. then he is reading something that "according to apple terms and conditions blah blah,,,,defects with your device due to accidents are not covered in warranty" he said it could be replaced but with charge already.. what should i do something about it?