1) I have injected 600% water into diesel enignes, it still runs, not very smooth, but it did'nt stall.
2) As long as you avoid the destructive EGT, you can continue to pump water/methanol in to extract more power.
I have spent sometime analysing the logged data from the dieselmax project. It appeared to me water and avoid the destructive temperature build up in a 5bar bar manifold pressured diesel engine. Without water, the engine was only safe at 550BHP rather reaching a goal of 750 target.
http://www.aquamist.co.uk/dieselmax
The constraits for power production are:
1) melting point of the internal components
2) mechanical strength of the components.