If the battery got so hot that the OP was unable to touch the mod with his hands he said the mod was sizzling. Water or not the integrity of the battery is compromised and should be taken out of service and disposed of properly.
Edit: Back when I had a still I learned water boils at 212 degrees there is a slight variation the further you go above sea level but that taken aside if the water he poured on the mod sizzled Its safe to assume the external temp was at least 212 degrees.
Agreed. Also supporting the temperature is the fact the shrink wrap started to shrink further,and split it. Just looking at the heat shrink, I can tell they used a high quality shrink wrap... that was on the battery side. on the atomizer side, the delrin drip tip started to melt. Temperatures were up there.
1) it's not worth the gamble. Batteries are the cheapest part of the mod...even for a clone.
2) It is an older style battery. 1600MaH... It was nearing it's life cycle at 2 years old.
As far as the battery goes, I don't know what to do with it.. there's not a recycling area nearby. Definitely not going to be reused.