While the U.S did commit many atrocities during the Korean war first hand accounts the Sinchon massacre was not one of them.

North Korean claims.

On October 21, they drove five military trucks full of inhabitants, whom they drowned by unloading the trucks in the artificial lake of Sowon. A total of 1,640 people were drowned from the end of October to the end of November in Sowon and Pogu lakes.

On December 7, US soldiers under the command of Harrison kidnapped the children […] imprisoned in a former powder warehouse in […] Wonam, Sincheon county […] and killed them by giving them gasoline instead of the water they were asking for. The surviving children and the mothers were covered with gasoline, and they threw fire and grenades at them. More than 400 women and 102 children passed away.

The truth was that the massacre was committed by Koreans on Koreans. Through out the entire was both sides would massacre anyone they felt were sympathizers to the other side. The massacre has always been used by the north as a propaganda piece by the north against the United States. In Hwang Sok-yong's The Guest while fictional tells some historical accounts some of Christians and communist committing atrocities throughout the war including communist massacring Christians at Sinchon. It also puts Lt.Harrison in Sinochon for only two hours on October 17. Historian Bruce Cumings's also put the blame on Koreans massacring Koreans as the most likely candidate for the massacre.

In conclusion yes Picasso's "massacre in Korea" was most likely based on a real massacre, but it puts the blame on the wrong party. Picasso was a well known communist so his depiction of the events can be taken with a grain of salt. We may never know what took place due to the Historical revisionism that took place in the north post war.

This is a complex topic because Picasso wasn't painting for the purpose of recording a specific historical event. If he were, then we should criticise the way he drew the soldiers (e.g. the officer holding a sword). Rather, his purpose was to make an overarching comment on the war and the foreign intervention as the cause of the killing of innocents.

Why were such killings taking place? These events are continuations of what took place during the period between the end of WW2 and the korean war and can't be properly understood without that context.

I wrote a longer background on a question about pro-japanese collaborators but parts 1 and 2 are relevant.

The short of it is that collaborators, having draped themselves as "anti-communist" and "conservative" to ingratiate themselves to the americans, were cemented into power by USAMGIK (and Hodge specifically) against the wishes of the korean people. They engaged in political violence, because everybody who wasn't with them was a "communist" of course, to prevent any form of government that would see them called to account. The Jeju massacre is a well-known example of what took place at the time and the Gwangju massacre is a good example of political opposition being labelled "communist" for the purposes of suppression.

Political purges took place in the north as well, albeit not as violently as in the south it seems. Generally speaking neither of the two governments, in the north or the south, would have come to power without foreign intervention. Instead, the KPR seems to be the closest example of what would've taken place without the american & soviet occupations. Based on the cooperative and peaceful nature of politics during the KPR period, political violence in the absence of foreign intervention seems unlikely, though some caution might be warranted in extrapolating too far from the few months the KPR was in place.

During the war both the south and the north assumed that the war would be final, i.e. reunification, so both sides engaged in purging what they saw as future internal opposition but the roots of the killing lay in the post-war occupation periods leading up to the war.

Going back to Picasso's commentary on foreign intervention, whether one agrees with his commentary would come down to one's opinion on whether one sees indirect responsiblity as responsiblity, i.e. enabling and encouraging the violence but not directly pulling the trigger.