Well, the back and forth is pointless. Anyway, not a single person, IMO, has responded to this thread with a lick of useful information. But that's a given, this is Mac Rumors, and when Apple comes into question most people here defend them like a newborn baby.
Take the phone in, explain your situation, and see what they do. When I ran my iPhone 4 through the wash the night that it launched I took it in, told them the truth, and they felt bad; I was only charged $100 (rather than $200) for the replacement. I didn't expect a thing from them.
Worst case scenario, grab some silvadene ointment for the burn, spend the $229 to replace the phone, and don't sleep with a soggy phone on your hip.
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Listen, he spilled a bottle of water, on a table, where the iPhone sat. I think most people in this occurrence wouldn't expect the thing to have gotten wet enough to do what it did. There are WAY more threads regarding full submersion stories that worked out than there are of stories of batteries having a chemical meltdown. I am just saying, lighten up on the guy. If you don't feel you were harsh on him, you have absolutely no reason to respond to my post, as you wouldn't feel I was talking to you in the first place, right?
I think he should go to apple store and see how much they want for a new one and hopefully they will only charge 59 for the battery and replace whole phone. 229 isnt worth paying for an iphone 3gs these days