I don't know enough to be able to say for sure you can fix it, I don't work on them.
it would require quite a bit of time depending on how used to working on them you are. You may find out after spending a lot of time working on it that the water fried the graphics controller or something else and the screen is ok.
Getting a used one on CL might be a good choice as well.
If you do want to try and fix it, you might have luck buying one on CL or online of the same generation (model) that has a cracked screen and still works, and then get to swapping out parts you need until you have a nice working one. Maybe even one that has more storage.
of course after your all done you will have a small pile of parts left over, an extra battery, etc and the time spent fixing it. It would not be responsible of me to assume this will all go according to plan too, these things are complicated small electronics, the kind of thing i might end up using my dentist glasses to work on.
Again I don't know what generation you have but most people doing something like this would have an ipod opening tool, an apple spudger, a quality correct size phillips #00 and #000 screw drivers by a company like Wiha who makes a nice ESD series models for a range of phillips and torx drivers + other stuff.
They are small repair shops, a good one would need to be found is the hard part, they are usually nice and can order parts for you cheaper and ensure it's the correct one, diagnose it and repair for you at much less cost then the apple store. If its too old i might not be worth going that route.
lastly you could put it back together and sell it, it's a time is money kind of thing, at least that is my thinking, selling it as described might yield a better result then you think depending on what generation it is, capacity etc.