Many WWII aircraft injected as much as 50% water to fuel even at A/F ratios richer than 11:1, often leaner than 20:1 as well.
I think that's more a problem with the ignition system. The Aquamist WI setup shouldn't even be capable of drowning the engine.
The water in the air might be making it too easy for the spark to jump the stock gap. I wonder if a larger gap would be appropriate when running high water/air ratios.
Also remember that, by the time your cyllinder fires, the temperature of the air in the cyllinder is well over 350F.
Adrian~
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