How long ago was this? You probably want to leave it in the rice for at least 4 days, if not longer.
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UPDATE:
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Okay, it sounds like everything is okay except for the digitizer. Hopefully, the digitizer is what has died and not the place on the motherboard. You'll need to buy a new digitizer, which you could purchase from [http://www.ifixit.com/iPod-Parts/iPod-Touch-Gen-2-Front-Panel-Assembly/IF140-003|iFixit]. If you know what you're looking for, you could probably get it for cheaper off eBay, but the safe bet would be ordering from here.