A laundry appliance includes a basket rotatably mounted within a cabinet and defining a chamber configured for receiving a load of clothes, a water supply valve for regulating a flow of water into the chamber, and a camera assembly mounted within the cabinet in view of the chamber. A controller is configured to determine that the water supply valve is open to permit the flow of water into the chamber, identify an anticipated fog condition within the chamber based at least in part on the water supply valve being open, obtaining one or more images of the chamber using the camera assembly, analyzing the one or more images of the chamber to determine an actual fog condition in the chamber, and implementing a responsive action if the actual fog condition is different than the anticipated fog condition, e.g., providing a user notification.