Water heater (Whirlpool EE3J40RD045V)sits out side of home in a shed which has a leak which falls on the water heater. I woke up one morning and there was no hot water (not surprised). When I press the red button on the water heater control panel it clicks but never comes on. I removed the cover of the upper heater element and found that it was full of water. I sponged out as mutch water as I could and let it dry out for a few hours. After turning the power back on I here a continuous clicking sound coming from the water heater control panel.

You are just going to have to take it apart and look for a place where it has been arcing to ground. Remove all panels and take a heater near the hot water heater and dry it out. Look where the burner is located and see if water got down there as well. It sounds like an igniter was trying to fire the pilot light, so when you get it dry it may fire right up.