-I've read how Satoshi embedded a message in the genius block. How is this accomplished? Is this permanent?
The genesis block is "special". It is actually never shared peer to peer. This is because it forms the begining of the trust chain. All Bitcoin clients have to know the genesis block in order to verify anything else is correct. For this reason the genesis block is hard coded into clients. If it wasn't it would be very easy to trick new (bootstraping nodes). The first thing they would ask for is the genesis block and the attacker would give him a fake one, one then feed him false blocks which validate off this false blockchain. The attack is called an isolation attack and clients make this much harder by including the genesis block "built in" and putting checkpoint hashes to ensure the blockchain can't be modified below a certain depth.
-Can someone show me how to do this with open source code? I want to embed: text, sound, video into the blockchain using software and/or bitcoin transactions.
No (or at least I won't).
-I think is a great concept, because it could decentralize and uncensor media on a global level.
It will also spam the blockchain, filling it with false transactions, which bloat the UXTO and make the entire network less efficient. Sorry there are better ways to achieve distributed storage systems that don't involve the blockchain.
2.I want to explain BTC mining with the analogy of a network of computers playing Pacman. Any suggestions?
It is a pretty bad analogy. Don't feel bad. Nobody understand how Bitcoin works the first time. There are likely large areas where Bitcoin works differently than you think it does.
Just one example. The "level" isn't a certain length. The next block could be solved in a single attempt (one pellet) or 10x as many hashes (pellets) as the targeted average. The network can only set the average number of hashes/attempts/pellets per block.
4.Is cloud mining an investment in infrastructure or a waste of BTC
Get ready for people to tell you it is the greatest thing since sliced bread (and share their affiliate link). Yes they are a waste.
If you had a machine which printed one dollar per day why would you rent it for less than one dollar per day?