I found it interesting that guys that took 200-300hp from Volvo redblock motor by slapping turbo on them, reported improved fuel economy over original bit over 100hp engine, but it probably is that working area of engine is much better after modification.
I think that with water you could get away with leaner mixture, but can't remember that much anymore from such old stuff. In marine applications they use water injection too, I have been told, no first hand experience though.
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