It doesn't sound good to me. Capacitors can look like they're shorted when checking for continuity, but only for a brief period of time while they're charging. If it's a steady short then it's probably dead.
To keep them cool while soldering, use the lowest temperature that will do the job and even more importantly, use a soldering iron tip big enough to transfer the heat fast enough to do the job. Apply flux prior to soldering to help things along. Make sure the soldering iron tip is clean and shiny, hence tinned with solder.
If you can't solder the joint in 3-5 seconds, give up, clean up, and try again.
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The Gadget Shield: accelerometer, RGB LED, IR transmit/receive, speaker, microphone, light sensor, potentiometer, pushbuttons