When my wife dropped her phone in water a while back, the guy at the Verizon store put it in a beaker of alcohol and said it MIGHT work. I guess the idea is the alcohol displaces the water, and then evaporates. He said it works about half the time. Her phone worked about a day, then she got a new one.

I use a protective box for my Axim. Got it at Otterbox at OtterBox.com: Otterbox, Waterproof Boxes, Waterproof Box, Waterproof Plastic Boxes, Waterproof iPod Cases. Hangs around my neck and OK to use in the rain, or dropping into water. Of course, since it is around my neck all the time, it doesn't fall much.

Sorry for your loss
JF