Just a few years late and only answered for completion sake. Who knows? Somebody may just run into issues with their "old" camera. Anyhow....
You will need to have to treat this just like any other water damaged device. For now, you want to stop continuing to try to operate your camera. This potentially can make a bad situation worse.This may further damage your phone.
The next thing to do is to clean it. Disassemble your camera using [[Topic:Canon PowerShot SD1300 IS|these guides]] as well as something like [https://www.youtube.com/watch?v=fk7MEnqYn6U|this video]. Remove the main board. You must remove the EMI shields from the circuit board. After you remove those, clean the whole board, connectors and all with +90% isopropyl alcohol. Follow [guide|5825|this guide] Even so it was written for an Apple iPhone 3G, all the points are still pertinent to your camera as well. While you clean your board etc., check for any obvious damage, like burned or missing components etc. When it is properly cleaned, you must be ready to replace the battery. All these steps are to avoid delayed failure caused by corrosion. Best thing to do would be to clean it with an ultrasonic cleaner, but if you do not have access to one, this will at least help. Once all this is done, reassemble your camera and reevaluate. Until it is cleaned, everything will only be a guess. It is possible that you have a bad lens since it is uncommon for a lens to fail due to water damage. It may have gotten knocked of track when it got submersed. Take a look [http://camerarepair.blogspot.com/2007/12/fixing-lens-error-on-digital-camera.html|on here] for some ideas on how to get it back to working condition. If none of those work, use this guide [guide|87051] to repalce the lens. Even with all this, water damage has only a small chance to be fully repaired, but at least you can give it a try.