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water in crankcase?

I have a snapper fwd 6.75hp mower that has moisture in oil pan(?) Oil has milky color. Is there a way I can dry that out, mower runs with white smoke, but fear damage.
Deroe, April 2010
I fear the damage is already done, depending on how much damage has been done as to wheather its an engine rebuild or a new short block.

Husqvarna man, April 2010
link Click here to see other fixes for Snapper.