One way would be to use the "Selection Brush" you’ll find it in the ToolBox to the Left on your screen…. its a brush that looks like it has a dotted line in front of it… use that to select out the part you do not want "Blurred"… with this brush you can select different sizes, styles and feathered edges (see the menu bar when you select the brush).. the nice thing about this brush is that if you select outside of what you wanted by pressing and holding the "ALT" key you can push it back…. once you have that done in the menu bar you will see "Selection" click the drop down and select "Mask"…. you can play with the type of mask… like "Overlay", "Soft Light" etc as well as feathering the edges and the %age of Mask… when satisfied.. go Filter>Blur>(your choice of blur)…….
Here is one I did with the method described…
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http://groups.msn.com/PhotoGraphics/gardenofphotographics.ms nw?action=ShowPhoto&PhotoID=9409>
David