If water somehow got into the transmitter it could have shorted out, and then the light would come on since the receiver isn't getting a signal anymore. I don't really see how water would get into the transmitter since the positive air pressure in the tire should prevent water from getting past the valve stem core. If the cap is missing or the o-ring seal is damaged then it's possible that the core could be contaminated and would prevent a signal from being sent since it is the antenna. You might try removing the cores to see if they are corroded. The cores could be replaced, but they are specially coated to prevent galvanic corrosion, so you can't replace them with a standard valve core.