Just a few comments on water injection....
Water injection was developed and used during WWII on high performance aircraft engines. The purpose of water injection is to suppress detonation under high boost conditions, allowing higher boost without detonation. The water injection itself does not produce more power - it allows higher boost levels, or more advanced timing, to be used without increasing fuel octane rating, thus creating more power.
It has been used in automotive applications for the same reasons - the Turbo Corvair Monza Spyders had water injection to allow higher boost levels and thus more power. Many aftermarket turbo manufacturers offer water injection kits to allow higher boost - and power - levels. Again, the water does not produce more power - it allows use of higher boost.
I've seen stated that the water turns to steam, and the steam creates more cylinder pressure and thus more power. The coefficient of expansion of water-to-steam is nowhere close to the power and expansion of burning gasoline, so the steam is not creating more power - it is only suppressing detonation. In fact, water (and humidity in the air) displaces oxygen, and will actually produce a power loss - not a gain. By displacing some of the oxygen, humid conditions cause an engine to effectively run richer, and that is the reason some people observe a smooth-out of their idle and better running performance. If you observe this under high humidity conditions, you are actually better off tuning your carb and setting it up right rather than displacing the oxygen in the air with water vapor. Dry air has the highest density (mass) of available oxygen - humidity displaces oxygen. The water injected into the engine does not turn into free Hydrogen and free Oxygen molecules to create power - this would require nuclear fission, and your small block Chevy is not a nuclear reactor. Further, your internal combustion engine is a heat engine, and produces more power with more heat. When water turns to steam, it is actually consuming energy to produce the change in state from liquid to vapor, thus cooling combustion chamber temperatures.
It is possible that water injection can produce better mileage if the carb was running too lean to start with: By effectively richening the mixture to a "correct" A/F ratio, you will produce better power with the same throttle opening. But you can get the same, and probably better, results by fixing your carb and jetting it correctly to start with.
In summary, water injection is a great way to suppress detonation in high compression engines and in supercharged engines, thus allowing more aggressive timing curves and higher levels of boost, thus producing more power. Water injection in and of itself does not produce more power, but may give the illusion of better operation and performance by masking the problems created by an incorrectly set up carb.
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