Your car is a neat project. I think it's fascinating watching an old, conventional restoration. That engine bay is cavernous!
I believe gas engines are only ~30% efficient. Turbo-compounded diesels have reached ~46%, but they are about the most efficient of internal combustion engines.
I'm not too familiar with older engines, but I think your % gains seem a little optimistic. Your biggest gain from modifying the engine would probably come from increasing the CR, as I bet it is really low (6.5:1?). I've only seen water injection applied to heavily boosted/high CR engines (e.g. WWII aircraft), but I suppose it might work alongside advanced timing.
The hydrogen generator will probably be a waste of time. I've never seen one work and I can only conceive of it helping raise a fuel's octane number. I think you'll see the biggest gains by modifying driving style and sticking to more conventional tactics first.
I look forward to seeing the rest of the restoration.
- LostCause