Yes, we don't want to commit fraud, but at this point we don't know the water caused the damage. It was most likely the drop. The OP can tell them it fell, which is the truth. If (and again IF) the water didn't contribute, then remove that excuse for the tech to latch on to.
I took my OG Droid into a Verizon store because the compass was 90 degrees off, the tech said I had too many apps running and did a factory reset. They were looking at my apps list and not running apps. I told them I had done a battery pull which would've killed the running apps anyway.
I'm just suggesting they take it in, tell them it fell and the camera doesn't work. At this point there is no proof the water caused the problem. If they find water damage and ask they can say it was raining when it fell.
I'll go with the suggestion of leaving it dry for a few days just to be sure. It might help.
You're still committing fraud. It's more of a "gray area" by "don't ask, don't tell," but it's still fraud.
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