I dropped my 3G iPhone into water too and experienced similar problems, dim display at first and then after a few minutes of water damage nothing. I had given it up for dead at first until I discovered this site... I followed the instructions to remove the display up-to step 6 and found drops of water 'here and there' within. Unfortunately when I pulled the iPhone apart at step 3/4 connector 1 pulled out by itself (Ooops!) so be careful. To remove the connectors I used a small size 0 jewellers screwdriver and a very light/careful touch when prizing them up VERY gently from a corner, they will pop out but you will have to be very careful not to damage the cables (I did not have a plastic 'spludger').The connector marked 3 with the tab can be flipped up using the screwdriver too. This is as far as I went on mine as far as disassembly was concerned. I mopped up all the drops of water could see and gave all the exposed electronics a good dry with a soft tissue. I then put it all back together left it in a dry war...