If its a water damage phone, if the phone was turned on when submerged in water, it usually damages internal components, if the phone was off when submerged, then you might be lucky, only if you didnt turn it back on until it was completley dry!
You could try the sony ericsson software update to see if that helps but from experience i dont think it will, it may good idea to have your mobile insured as then you can get a replacment if this happens again!
Hope this may help
Andy
February 2008