Camera button goes crazy when pressed.

I did in fact open it and let it thoroughly dry with no luck. But I did resolve the issue!

While the droid did originally go crazy due to water, this specific problem was actually not the water. If you open the droid and directly press the camera button sensor below the plastic button it works fine every time. But if you press the sensor in any way other than dead center the phone freaks out.

The camera button has two tiny sponges under it, one on each side. They act like a spring. When you press down, the sponge helps to push the button back up. Well, in taking apart the droid multiple times the sponge on one end of the button came unglued and disappeared. As a result when the button was pressed down the button went down at an angle instead of straight down. At an angle the camera button doesn't press the camera button sensor down in the dead center. When not hit properly the phone freaks out as described.

I bought a new plastic button and the phone once again works perfectly! (Whew!)

Excellent work. Glad you got it fixed. All the best to you.