Home button is fine but the iPhone does not "sense" it...
I have this iPhone 3G, it fell in the water and incredibly, it is working fine.
Only one major issue: the home button. I know it does work, cause I swapped the whole screen with another iPhone 3G. On the other iPhone the home button works.
So I guess the problem must be on the motherboard.
Marco Rotini, the very first thing with any water damage, should be to clean it to prevent corrosion. The guide to use is this one. I suggest you do not deviate to much from it, avoid acetones etc. since they can dissolve some plastics. Check all your connectors for corrosion, debris and bend or broken pins. Also check for missing and/or obviously damaged components. Hope this helps, good luck.