wow! that's bad, and i hope you can get your replacement soon that hopefully has the other aspects in excellent order (uniformity of lighting, no color gradients, etc.)
that shadow looks like what a couple of my Oasis 1's looked like with light settings 6-8, but more extreme. there were no blown LEDs in my case, just that not all 10 were uniform in their intensity when driven at "low levels."
LEDs do fail, but rarely. it's my guess that in normal circumstances, as you suggested, the battery will die before the LEDs do. i think you just got a bad one i would find it hard to believe that is a result of you using it while bathing.
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