Answer: Actually, yes, immediately diluting the urine with plain water is the best thing you can do. The spot is caused by excess nitrogen, and unless the grass is actually dead it should recover in a few weeks. If the grass is dead, you can reseed that spot. Loosen the soil, work in some good quality compost, rake smooth, seed, keep moist until it germinates which can take several weeks. Or, use a patch kit sold where grass seed is sold. Or, transplant a bit of sod.
Many households with dogs find that it works well to fence a separate dog run area for the dog's primary use. This prevents traffic damage to the lawn and also keeps the dog off the lawn in muddy weather and when it is frozen so it minimizes the overall lawn damage. And, it keeps the spotting problem in one area that can then be mulched or graveled. When you are outside and can play and visit with the dog, bring him over to the regular lawn area for fun and games. Another option is to train the dog to do his business in one certain area of the lawn only. This also limits the damage.
Here is additional information about dog spots and lawn you may find helpful. You may need to cut and paste the complete url into your browser to make it work correctly.
I hope this helps!
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