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I immediately fished the phone out of the water and dried it off, but it was too late. The damage had already occurred. The phone sounded a few half-hearted beeps and then did a flatline. It was dead as a door nail.
I frantically googled "phone water damage" and came up with quite a few interesting ways to solve the dilemma. One guy advised putting the phone into the microwave to dry out. Another said to drop it into a glass of alcohol, which would dry up the water and make the phone as good as new. Others advised putting it in a regular oven on the "low" setting or using the blow dryer on it. But the overwhelming advice was to place it in an airtight container of rice, which apparently will suck the moisture out of the phone. "Be sure to use uncooked rice as opposed to cooked rice" was one piece of advice. Duh......
Anyway, my phone is sitting in the rice as we speak and I'm waiting to see if this works. Otherwise I'll have to buy a new phone because apparently the Apple Store will not replace a phone damaged by water, even though it's still under warranty. This brings me to another interesting tidbit of information that I discovered while surfing.
The iPhone has a tiny hidden indicator that shows if it's been dropped in water. If you look into the hole where the headset can be connected, you'll see a white dot. The white dot turns red if it's been exposed to water. That way the Apple guys know if the phone really went haywire of its own accord, or if you dropped it into the Jacuzzi when you had one too many Manhattans. This brought up a whole new array of solutions (mostly unethical) for fixing the problem of the "red dot." Some said to put a drop of bleach into the hole, which will turn the dot back to white. Others advised using a toothpick with a little Liquid Paper on the end of it. According to these Youtubers, the guys at the Apple Store are so inept that they won't realize that Liquid Paper is covering the red dot, and you'll get a brand new phone out of the deal.
I'm not quite that depraved yet and so I'm waiting to see if the rice (uncooked, of course) remedy works.