Any small engine experts out there?

What do you think is a likely problem with my pressure washer?

In February 2013 I bought a Ryobi pressure washer from Home Depot for $359 (with a 3 year warranty) . It delivers 3100 PSI, flow rate: 2.5 GPM, pump: axial cam and has a 4 stroke Honda engine. Up until last week it worked flawlessly and the Honda engine seemed almost too easy to start. Also I only used it 3 times (about 6 hours of total use time) yet I changed the oil before using it this year.

Last week I was using it to wash our house to prepare for painting the house. It was working fine for about 30 minutes but when I started to to move the washer to another location, the engine suddenly stopped. I thought no problem as I continued to move the washer to the next location. However as I pulled the start rope I heard a loud pop and I saw a flame about 1 foot long shoot out from the exhaust muffler. So I let it cool down. But when it was cold I could not get it to start. I checked the spark plug (looked good), gas (tank full) and air filter (looked bran new spotless clean). When I try to start it would make a few soft popping-like sounds but not start. Also I saw a couple of drops of gas drip out from the carburetor. “Well that’s not good”, I thought.

Right now it is being serviced at a Ryobi authorized service center. It’ll he there for a few weeks (I was told).

Carburetor out of order?

Burnt-out engine?