With my first watercooling setup, coincidentally also a dual 120w peltier setup ... condensation killed my motherboard and processor. Took a LONG time though. I did everything perfectly, including insulating around the back of the motherboard, around the waterblock, etc ... but although I applied dielectric grease to the socket, I didn't fill it up and flush out all the air that was in there entirely, as I didn't know it needed that much at the time. Over time, the pins rot and messed with the stability. I eventually took it apart (months after first assembly) and when I took the processor out, some of thepins stayed in the socket. D'oh!
The processor was a stubborn overclocker, and the motherboard had cold boot issues long before I ever went to watercooling anyways, so it wasn't a huge loss.
with my bong setup, I've had some close calls with running out of liquid, but never had it overheat and shut down, thankfully. I'm more careful now.
I did have a MAJOR catastrophy though with it. I added an extension to the top of the bong ... and the tubing I had cut was cut for the old setup, which was about 8" shorter. It caused the hose to pull sideways on the bong, and although I had it duct taped to the windowsill as a temporary stabilizer, it pulled it over the next day while I was at work.
Gallons and gallons of water spewed over the carpet ... pushed up hardwood floorboards, but thankfully they settled down in a few months. No damage to the carpet ... water was clean, no additives because it was a bong.
The whole assembly now sits inside a plastic tub-thingie and the bong is tied to the wall with a few fisheye hooks or whatever you call them. No possible way for it to tip over ... and its highly doubtful that any water would make it over lips of the bottom unit even if the entire reservoir emptied.
Picture of current setup:
I've never had a waterblock or connection of any sort leak on me with the PC running at all (this is of course excluding the obvious leaktesting phase).