Seiko watches or any type of watch at all can develop moisture within the watch case over time. The moisture will most often become visible through the crystal as fog. Typically moisture builds up from either old and brittle seals at the watch back or crown, or from taking hot showers with the watch on. Hot water creates steam which many times can seep through watch seals while water cannot. Removing this moisture is imperative and can be done with a few careful steps.
Place the watch face down on the clean towel. Using the jeweller's screwdriver, carefully depress one end of the pin inside the bracelet clasp where it meets the watch case. If you catch it right, the pin should compress and that side of the bracelet should come free from the watch detaching the bracelet as a whole. Repeat the same task on the other end of the bracelet leaving the watch case and bracelet completely separated.
Place the edge of the screwdriver into the small space around the rim of the back cover on the watch case. This may be a tight fit but look for a place where the blade can slip in. Use the screwdriver blade to pry off the back cover of the watch case. Place the cover on the towel and lay the open watch face down.
Remove the watch movement from the watch case by lifting it with the screwdriver from the side furthest from the crown (winder). If the watch will not come loose from the case with gentle prying, leave it in the case and continue on with the next steps with the watch intact.
Turn the hairdryer on a low setting and aim it into the watch case until it is completely dry. Use the hairdryer to do the same thing with the watch movement. Do not make the air too hot or you will risk harming the watch movement which is mostly plastic. Once you have dried the case and the movement completely put the two components back together making sure they fit tightly together.
Replace the back cover of the watch by lining it up in the proper position then pressing with both thumbs until it snaps into place. Press all around the rim once again to ensure a tight seal. Place the bracelet at the band and wedge one end of the pin into place in the watch case. Use the screwdriver blade to compress the other end of the pin and move the bracelet into position. Release the pin and wiggle the bracelet to make sure it is locked in. Repeat this process with the other end of the bracelet.
If your watch still does not work properly after this procedure, take it to an authorised Seiko repair centre.
Make sure not to loose any part of your watch movement as the odds are it will never work the same again without it. Performing watch maintenance or repairs of any kind on your own can void your manufacturer's warranty.