Iphone 4 screen bubble/holes

I had my iphone in a decent size dry box that has an audio plug in it. Was playing music from the phone, not streaming. Turned the speaker off and when I turned it back on I noticed it stopped playing music. When I opened the box there was white powdery stuff all over one side of the box and on the iphone there is bubbled glass spot to the left of the speaker and a partial hole to the right of the speaker. Everything still seems to work though. Did the iphone overheat? Nothing else in the box could have caused this, and I'm fairly sure the iphone overheated but I have searched the net and can find nothing like what happened to mine. Is this a common problem when using a phone in a lifeproof case as well? Or would the dry box I used cause more heat?