A CWE is a cold water extraction, i.e. a simple technique that allows you to get rid of most of the APAP, aspirin or ibuprofen in your opioid pills. It involves crushing the pilss, dissolving them in warm water (use 40 ml/20 pills and even less water for less than 12 pills), letting the solution cool in the fridge (without freezing), which leads to the APAP/ibuprofen precipitating. The solution is then filtered through a coffee filter, so that the APAP/ibuprofen/aspirin remains in the filter. You are supposed to drink the filtered liquid. Here is a link with all the detailed info:
http://www.erowid.org/pharms/codeine/codeine_faq.shtml. It's about codeine, but it works the same with hydro or oxy (anything opiated).
As to the breathing issue, yes, breathing becomes labored on opiates, indeed. Have you talked to a doctor about it? I have no medical expertise, so I cannot rule out any health issue. But it might be the case that you are panicking and hyperventilate as a result, which may lead to an increased feeling of lack of air.
I once took 60 mg codeine after a long break from opiates and I started to feel that I wasn't getting enough air and some tightness in my chest. I got horribly scared. It most surely was a non-lethal amount and some people do not even get high from that (well, I am unusually sensitive to psychoactives and to other drugs and my usual dose is 30-45 mg of codeine). And I had taken the same dose before, back when I had a tolerance. This time I felt really sick, but I guess it was more of an anxiety case than anything else. I believe my brain sensed that my breathing got slower and started to flash out alarm signals, which led to an endless cycle of anxiety. Was my slower breathing cause for real concern? I don't know, to be honest. I was fine afterwards and I assume that, had it been serious, I wouldn't have pulled it off that easily. But I sure got to be more cautious about my doses after this event...
When and how did these breathing issues start for you? You've been using for quite a while - has it always been like this or did it start at a certain point in time? Does it happen everytime you dose?