First let me start off by saying that due to the water damage anything can be happening to the phone. Unfortunately most of what could happen usually isn't fixable.
With that being said, did you change any parts on the phone when you had it water damaged? Did it need a new LCD or battery? If so then a part could be causing the blue screen. Sometimes it is software that causes it. The only way to check the software is to wipe it back to factory settings.
Most likely there is a short circuit on the board caused by the water damage or possibly by some corrosion that was not cleaned. You may be better off finding another phone that will last longer and not have any of these unexpected surprises waiting down the road.
Best of luck and let us know if you need any other help!