A Kamush Esrog is valid. A dry Esrog is invalid.
What is the definition of dry: An Esrog which dried to the point it has lost all of its inside moisture is invalid. This means that the Esrog does not release moisture when cut.
How does one check an Esrog for moisture? The way to check an Esrog to verify whether any moisture remains inside is by inserting a needle with a string inside the Esrog and then checking if the string is moist. However one must beware not to reach the seed box with the needle or penetrate from one side of the Esrog to another [Nekev Mefulush], as doing so invalidates the Esrog.
Is one obligated to check his Esrog for moisture? There is no obligation to check an Esrog which appears fresh. If however the Esrog appears withered it must be checked.
Is an Esrog from the previous year valid? An Esrog from the previous year is certain to have dried to this point and therefore may not be used.
If one froze or refrigerated an Esrog from the previous year and it appears fresh, may it be used?
Some Poskim rule the Esrog is permitted to be used if it appears fresh. However other Poskim rule the Esrog is invalid even if it appears fresh as it is common for the Esrog to completely spoil after a few days of being outside of its preservation.
 The reason: As the Esrog is not Hadar. [645/1; ibid]
 The reason: (As the moisture of a fruit is like the blood of flesh thus if the fruit is lacking moisture it is considered dead, and the verse says “Lo Hameisim Yehalelu”)
 Piskeiy Teshuvos 648/2
 Shaareiy Teshuvah 648/2
 Igros Moshe 1/185