iPod Touch 5G rejection by the Genius Bar?

About a week ago, I dived into a hotel pool with my iPod Touch which was encased in a Life Proof case. I've been having this case for two months now and not once has it previously given me any problem, not even to water. I didn't notice water seeping into the case. As I pulled it out I immediately dried everything and tested out the iPod. All outside functions worked, home/power button, volume buttons. The screen worked as well but I was unable to slide it. I made the mistake of not turning off the power as I was on vacation and quickly decided to upload the pictures to my Macbook. I did so and then set it aside to dry, knowing the rice trick but not having any rice to use. (Again, I was on vacation and had no access to my car) As soon as I got home, I put it in a container of dry rice. A couple days nothing. It wouldn't turn on. After about five days, I plugged it into a charger and out showed the charging screen with the lightning. It stays on the screen for five seconds then disappears. I know my home button/power button work because when I press it while it's "charging," the screen shows up again. Also, when I try and put it in DFU mode, the computer identifies it as a need to restore with the title of my iPod being a generic "iPod" and not ____'s iPod as was previously put. I tried restore and it would always give me the 4005 error. I set up an appointment to the Genius Bar. As soon as I checked-in and told them about it having water damage. The guy working immediately told me I was out of warranty and proceeded to tell me that I had two choices alone. One, I trade this in for a refurbished one as at a price. Or two, I get a new iPod 10%. I explained that it was still working and was able to restore (this was before I tried restoring it) but he insisted that was all that could be done and that there was no help to be done to the iPod. I also found something odd. Knowing that Apple has my information (addresses of both kinds, phone number) as soon as I go to Apple discussions and log-in, I always get the server error and am unable to go to Apple Service Discussions. I tried my friend's account, relatives' accounts and they all work just fine. I know mine is not corrupted or any sort, I have no documented problems with Apple so why this problem? This happened the day on or immediately after my visit to the Genius Bar. When logged out, I'm able to see the forums again. I was also thinking I should replace the battery and perhaps that would fix my problem. I have already tried everything I could find on the internet, silica pacs, rice, connecting it to my mac, using different chargers, restoring my computer, updating iTunes, restoring. Same result. Stuck on charging screen, no water is visible on the screen. Not since the second day. Any help?

I don't know why you're doing battle with the iPod? It was obviously damaged by water seeping into it. Apple gave you the standard choice of repair... trade it in for a refurbished iPod touch (which would be just like a new one) or buy a new one. It's never going to work right again once water got into it. But that's up to you?