iPod down the toilet?

This is the question of the day in our house.  Poor Chase, and I use that loosely right now, left his iPod Touch where baby brother could get to it.  Next thing you know, Chase comes home from fishing and finds his iPod in the bathroom trashcan.  Now, little brother loves to throw everything away; including batteries that are not dead yet.  However, when Chase pulled his iPod out, it had drops of water in it.  We knew little brother had played in the toilet, so if he put the iPod in there, it must have been quick or somehow he had his hands wet and then touched it.  Who knows.  Needless to say, the iPod isn't working.  I finally was able to get it to restore and sync, but it still won't turn on.  We wrapped it in a papertowel and let it sit in rice to draw out any moisture, but it wasn't wet at all when he brought it to me.  Still nothing today.  According to Apple his only choice is to send it back and get a replacement for $99 or we could try an Apple store and see if they're willing to say it wasn't wet.  I'm doubting they'll say that and it's probably not worth the $30+ in gas it would cost to get to the nearest one.  I told Chase I'd pay for half of the replacement since little brother did it, but I wouldn't pay for the rest since I'd told him a million times to put it up and keep it up out of his reach.  They know he loves to play with them, so don't tempt a little boy how loves iPods and water.