Yeah - I can see that happening. With wet TP there would be a fair amount of mass and it wouldn't compress much - so all the momentum would be concentrated in the area of a roll of toilet paper. With a balloon, it seems the energy would be dissipated since the balloon stretches and then breaks. Looks like the PSI delivered would be limited by how stretchy the balloon is. If the balloon hit a concave area and thus trapped the energy of the mass of water I can see how it would make a dent but still it wouldn't have the psi necessary to crease steel. If it hit a convex shape like the crown of a fender it seems like it would scatter the water and dissipate the momentum (in addition to the crown shape being structurally stronger) so it wouldn't even create a dent much less crease the sheet metal like that.

I'm not saying this couldn't happen, I'm just saying he might want to look around and see if there was something else thrown because if there wasn't then that is one FREAKY water balloon accident!