Fill a large pot with water and turn heat to high. Peel the potatoes. If they are large, cut them in half.
When the water begins to boil, add peeled potatoes. Boil until fork-tender, about 20 minutes.
Drain the water from potatoes and let cool completely. Add salt and milk and mash with a potato masher BY HAND - don't use an electric mixer! Mash potatoes until no lumps remain.
Flatten about 1/4 of potato mixture into the palm of one hand. (You can reference the guide below during the next few steps!)
Spoon about 1 tbsp of picadillo into the center of the potato. Use your free hand to squeeze the picadillo a little to help condense it.
Begin rolling the potato mixture up evenly on all sides to begin shaping a ball.
Connect the sides together and smooth the seal to form a uniform ball. It should be somewhere between a golf ball and a tennis ball in size. Set aside on a baking tray lined with wax paper. Repeat with the remaining picadillo and potatoes.
In a medium bowl, mix eggs and water together vigorously - until frothy - for about 30 seconds. Set aside.
In another bowl, stir together the bread crumbs and all-purpose flour. Place this bowl next to the bowl containing the egg mixture.
Dip each potato ball first into the eggs, then into the breadcrumbs, making sure to evenly coat. Place back on wax paper lined baking tray. Repeat with remaining balls.
Refrigerate for 2-3 hours or up to overnight. If you are planning to freeze your papas rellenas, continue to the next instructions. If planning to serve, continue to "Fry Papas Rellenas" section.