Start with a new image in RGB mode.
200x200pixels
Use the brush to paint all over the image

Go to FILTER/DISTORT/RIPPLE:
Amount 180, Size: Large

Select FILTERS/OTHER/OFFSET and set the height and width to 100 pixels
make sure that the wrap around is marked. Use the Smudge tool to get rith
of some sharp edges

Now go to FILTERS/STYLIZE and
select EMBOSS with the settings
Angle -50, Height 2, Amount 99

Go to IMAGE/ADJUST/ and Hue/Saturation
Mark colorize and make your adjustments.
In this case I also rezised the image.
Click here to see the seamless backgroud.