It will be the pump housing has cracked, or something else damaged with the pressure. I have a KB5050 bought second hand with a similar leak. I stripped it down and the pump housing had a crack. I coult not work out how it could break.
I spoke to Karcher and they said the most common damage is owner use. It is either frost, or, the most important thing with a pressure washer is to use a hose of at least 7.5 mtrs, and it MUST NOT have a "non return" connector on the hose. ( Most hozelocks have one at the "nozzle/appliance end")
The hose must work with no "nozzle" attached. This is because the pressure in the washer at times has to be able to release back into the hose. If it has a non return, the pressure builds up in the machine and cannot get out of the machine because the valve at the inlet blocks it, causing a crack in the casing or somewhere else.
I have purchased a new housing and am waiting to fit it. It cost £30.
Check you hose is long enough, and does not have a "non return" valve.
Dave
January 2011