Absolute worst case scenario would be bending a valve and breaking the top ring land, a leakdown test would tell you more than a compression test, but a compression test is a very good place to start, and if you do any modifications or tune-ups on your own, a compression tester is a good thing to have anyway, so buy one. As for the leakdown tester, they can be pricey, so take it to a good shop if you want a comprehensive diagnosis before taking any action. Sometimes you can get lucky, sometimes you don't. Water on it's own doesn't hurt an engine, the super-high cylinder pressures it promotes [since water... you know, doesn't compress...] is what hurts an engine, test twice, fix once.