Small Engines (Lawn Mowers, etc.): Possibly the lower seal on a Honda GCV160, honda gcv160, power washer

Question
I have a power washer with a Honda GVC160 motor (5.5hp).
The motor quit running while I was using the power washer and seemingly "locked up". I checked the oil and it was unbelievably milky. I took the engine off and drained the oil and refilled it and flushed it 5-6 times. Got the motor freed up and after all the flushing, restarted it. Seemed to run okay, smoked some but ran. I hooked it all back up and started using it again. It quit after 10-15 minutes but didn't lock up this time. Checked the oil again and it looked like melted marshmallows. What the heck is going on? Could it be the lower engine seal letting water up into the engine? If so, how hard is it to replace this seal and are there more than one I should replace? AND, exactly how do I do it? I'm mechanically inclined but have never done anything like this before so please treat me like a 10yr old when explaining how to do it. Also, could there now be further damage that would make it not worth fixing?
Sorry for the mile-long question, but thanks for any help you can give me,
Rick

Answer
What pressure washer do you have?  I have not heard or saw water from the pump getting in the engine.  There would have to be something seriously wrong for water from the pump to enter the engine from the engine seal.  It would be more likey that engine oil would leak on the pump.

Does the oil smell like gas?  You should be able to remove the pump from the engine and run the engine without the pump.  I would do this first and see if the oil turns murky without the pump.

Let me know what you find.
Eric