Water in power steering fluid? 1999 silverado 5.3

Heres the scenario: Went to start my truck for workthis morning. Truck starts and about 5 seconds later starts to squeel very badly. Turn truck off, pop hood, see fluid coming from power steering box. Look closer and one of the rubber lines that was clamped on to the power steering box and been forced off. Pull the cap off to find milky power steering fluid (looks like coffee with lots of milk). Tried to pull a hose off and drain the fluid turning wheel lock to lock...thought I got most of it drained. Added more fluid, started truck and 5 seconds later starts squeeling and making noise like something in the pump is not right. Any suggestions on what could be wrong? My theory is that water somehow got into the system(no idea how that would happen), when I started the truck the water and fluid mixed, water expanded? and shot the hose off. Also it had been snowing/freezing rain here all yesterday, and looks like my fluid goes into the radiator to cool it. Any help is much appreciated. Any questions just ask, thanks guys.