Answer to "Upgrading the logic board possible?"The casing is the same on the late 2010 and the 2011 Core i5 model. You should be able to swap them out without too many problems. The heatsink is different on the two models, so you will need to replace it as well. That being said, you may not want to replace the logic board. With this being a waterspill, the keyboard is probably shot and their could be other damage (LCD connector, solid state drive, daughter board etc). Without seeing the logic board it's hard to tell, but a fried keyboard could make you think the logic board is dead. The power button goes through the keyboard, so you could be looking at something as simple as a bad keyboard. -- Ryan iRepair Savannah
Answer to "Does anyone know where this small piece belongs?"Either the power button or the volume buttons. I've seen an extra small part or two floating around inside factory sealed iPhones before, so its not unheard of. Its also possible your friend had the power button replaced (common issue on 4S) and the tech dropped the old piece in the process. As for it getting hot, you likely have a short somewhere. Check and make sure you don't have any loose screws or metal floating around. You might also try taking out the main (rear) camera and seeing if it still gets hot.