I experienced the same problem with mine after washing it! Doh! Unfortunately I did not research how to dry it before I turned it on. Double Doh! Fortunate for me it turned on but weird things happened at that point. I quickly looked up solutions for drying my iPod touch. These are the steps I took;
# I tapped all of the water out that I could (shake shake shake)
# I dried (external) it with a blow-dryer
# I placed it in a dry place for 24 hours (on top of my flat screen TV)
After 24 hours I turned it back on and low and behold it booted up. I did have water damage to the screen. Again fortunate for me after about a month this completely dissipated and now it is like nothing ever happened.
I hope this information is helpful to anyone who uses it!