Combine 3 cups water and potato in a Dutch oven over medium heat; bring to a boil and cook until the potato is soft, 4 to 5 minutes.
Stir the butter into the potato cubes and cook an additional 5 minutes.
Whisk the flour and 1/3 cup water together in a small bowl until smooth; stir into the potato mixture.
Mix the oysters with their liquid, whipping cream, mushrooms, powdered milk, salt, and Worcestershire sauce into the potato mixture; cook until warmed through, 5 to 10 minutes. Thin with additional water as needed, adding 1/4 cup at a time, stirring continually, until you get your desired consistency.