iPhone 3G turns on in a weird stranger way..

Ok, So I bought this phone on ebay to attempt to fix it. I fixed it and the power button doesnt turn the phone on and when connected to a computer it still doesnt turn on. ok thats not my issue, the weird thing is.. when i disconnect the usb part of the charger from the computer (NOT the phone) it turns on.. why?

The power button, home button works. makes calls without a problem. although.. the phone is extremely slow.

is there some possible water damage?