The Collaborative International Dictionary of English v.0.48:

Washout \Wash"out`\, n.
   1. The washing out or away of earth, etc., especially of a
      portion of the bed of a road or railroad by a fall of rain
      or a freshet; also, a place, especially in the bed of a
      road or railroad, where the earth has been washed away.
      [1913 Webster]

   2. a complete failure; -- of an enterprise.
      [PJC]

   3. a person who has failed a course of study or training,
      leaving the program before its completion.
      [PJC]

WordNet (r) 3.0 (2006):

washout
    n 1: the channel or break produced by erosion of relatively soft
         soil by water; "it was several days after the storm before
         they could repair the washout and open the road"
    2: the erosive process of washing away soil or gravel by water
       (as from a roadway); "from the house they watched the washout
       of their newly seeded lawn by the water" [syn: washout,
       wash]
    3: someone who is unsuccessful [syn: flop, dud, washout]