As Jonathan said, water damage is tricky to diagnose. There may be corrosion on the screen connector causing the touch not to work. Its also possible a component on the board is shorted out. You will have to replace the whole screen assembly (glass, digitizer, LCD) if you want a new touchscreen because it is bonded together. A new screen will do nothing though if the corrosion isnt cleaned off of the connector, or if the logic board is shorted. Its going to be about the same or cheaper to replace that phone than fix the screen.