I just brewed an extract Bavarian Hefe on Fri night. I’m fermenting in a 6 gal. Better Bottle with an airlock. Now, I have wort in the airlock (I’m guesssing I should have used blow off tubing for this recipe). Basically, the krausen has reached the top of the better bottle and is now pushing up into the airlock. The airlock appears to be working though, per se.
Is this beer toast now, or should I continue through the entire process? Has outside air been introduced into the fermenter?
Never toss a beer until you are absolutely, positively, with out a reason of doubt know the beer is bad. That can take 6 or more months in the bottle before you determine that.
You can always use a blow off tube. Then you will never have to worry about krausen in the air lock. You can use a blow off tube from day 1 until bottling day. Commercial brewery don’t use air locks.
http://brewing.lustreking.com/gear/bbbot.htmlIt doesn’t matter if outside air has entered the fermenter. I would matter it that air has some bacteria in it that spoils the beer. See my 1st statement above. 
Your beer is fine. I’ve done 2 Hefe’s recently, both in buckets, both clogged the airlock and popped the bucket lid.
Take the airlock off, clean it, add fresh sanitizer* and replace it.
Repeat if it gets bad again, until fermentation settles to the point where you stop getting junk in the airlock. in my experience the 3-piece airlocks are less prone to clogging than the s-types.
Minimize how long the fermenter goes open, but don’t panic over several hours worth.
*if you didn’t save sanitizer, booze is an acceptable alternative.
