Step Five
Now comes the fun part.  This is where you actually get to have some creative input into your final artwork rather than relying on filters to do it for you.  First, invert your image again by choosing Image>Adjust>Invert or use the shortcut key Ctrl/Command - I.  Next, slop up the letters a bit by adding some drips and drops here and there.  You don't have to be too neat with this, just use the Paint Brush Tool with a hard, round brush and have some fun.  Mine is shown top right.

Step Six
The next step is to spread out and smooth the letters to further enhance the liquid appearance.  The technique used to do this is one that I use quite often for many different effects.

Use Guassian Blur to increase the range of grayscale pixels in the image and spread them outward.  Choose Filter>Blur>Guassian Blur (Radius: 4.0).

Next, use Levels to sharpen the letters again.  By increasing the range of black pixels in the image and reducing the range of white, you will end up with the image shown middle right.  You will notice that this also smoothes out the drips you added with the paintbrush tool.

Choose Image>Adjust>Levels (Input Levels: 175, 1.00, 200).  The levels dialog box and the settings are shown bottom right.

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Levels Tip
The Input Levels shown will get you in the ballpark.  Use the black and white arrows to fine tune the effect.  As you slide the arrows forward and back, you will get a real time preview of the results.  Stick to moving the black and white arrows only.  The gray arrow will follow along for the ride all by itself.

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