AC 840 loader problem

Hey guys, a friend of mine has an 840 loader that we have been having problems with. It seem to have lost power (diesel engine) and she won't spool up like it used to. Its never really run right but its run better than it is now. We did power wash it to get the grease and oil off of it, and it seemed after that it started really acting up. Could water in the fuel be causing this? It blows white smoke out of it, doesn't really burn oil, but it looses oil through the dipstick. (got that fixed). But another thing I was wondering, there looks to be a breather tube on the right side of the engine (operator point of view) and when she gets warmed up, it starts blowing white smoke out the hose. It looks to be a breather that goes up to the valve cover gasket. What could the smoke be caused by? Its not very WHITE but you can tell its blowing out and pretty hard. (lets keep that pg please) 

Are there any rubber fuel lines , if so it may be sucking air making ran poor. The white smoke from the crankcase breather if it starts after the engine warms up is probably water in the block and it  is actually steam  just my to cents