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The white stuff is water and oil/gas/exhaust are mixing and if this is in the cylinders you may have a cracked or corroded water jacket cover, which is what your going after to inspect, could also be a gasket issue. May be getting water in for other reasons but this is the most likely and recommended place to start. Yeah I would clean out the white stuff as best a you can. When fixed it will burn the rest out when you run engine.
The third bolt is under the bracket if you don't see it I can try and find a picture for you.
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