My iPhone fell in water, and has problem with installing the IOS?

I have an iPhone 2g 8gb and by mistake i put it in a box with some water. After 6 hours i went to see my iPhone and i saw that it was in water and i didn't knew what to do and i put it on a shelf in my house until a few days ago(all this happened around 3-4 years ago) that i grabbed it, and i was wandering if it will open now. I tried to open it with the lock button but it didn't worked. I connected it to the charger and it opened to the srceen with the battery. After a while i went to see it and it was on the screen that was telling me that i needed to connect it with itunes. I connected it and iTunes was saying that i needed to format and restore it. I downloaded the latest available IOS and i made a restore but when it tries to install the IOS, the iPhone disconnects and connects. What can i do to repair it, if i can?