Gee... This question was tougher than I thought. You guys are way off (so far). There was no liquid involved whatsoever. We figured that the battery was copper/zinc bimetal, as newer pennies do have a zinc core. He has had this for 5 years and it still works like a charm. We couldn't take it apart without destroying it, so I'll describe it the best I can. The penny looked as though it was sawed in half lengthwise (edgewise). The middle of the penny was puckered out, so something was jammed into it to force a pocket to form between the two halves. Then, there appeared to be a semi-circle cut into the penny along the top of Lincoln's head. One wire of the diode went into this semi-circle slot and disappeared into the penny. The other wire of the diode you couldn't see, so I assume it went into the core from another place. The cardboard was a disc the size of a half dollar. There was a penny sized hole cut into the center, but not all the way through, so if you looked at it from the backside you could not see the penny. The LED's wires went in from the side through the channels made from the corrugation, so the light itself extended outside the periphery of the cardboard disk. When you squeezed the penny, (evidently forcing something to contact something else in the penny's core) it made the light shine. And it was very bright, more than enough to read a map in the dark.
I very much want to make one of these for a survical kit. I've seen one on the net made from a film cannister and a 9 volt battery, but this is much larger than I want.
Anyone?