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Is This Water Damage?

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http://forums.androidcentral.com – Hello All! I'm just after a bit of quick advice if possible. My phone stopped working around 2 weeks ago with two small strips on the touch screen not responding to touch. I was in bed at the time so not exactly a wet place! (yes yes, you can make some jokes here!). I've never got my phone wet (never dropped it, don't take it into the shower etc etc) and yet when I sent it back my carrier is refusing to repair it as they claim it's water damage. I simply can't understand how it could of been water damaged so a little frustrated and confused. I've got these pictures that I'd like to just con (HowTos)