I don't doubt that there is a means of seperating h2o energy effectivley.
However, it is highly questionable that it has been acheived. Nor that the technology to do so will be discovered in our lifetimes.

However, refering back to what the link said about the mark two vesion. When the gas supply was hooked up to the pcv port under the carb, it was difficult to control engine speed. would not this be beacause the butterfly has no means of regulating the gas flow?
Unlike the mark one where we can only assume that the air cleaner was pressureised with it. I have heard of people (nutters) who have rigged up 9kg lpg cylinders to their aircleaners, and regulated the pressure to 4psi. Dodgy as hell, and highly illegal. but apparently it worked.

The part which discredits the feasiblity of the whole idea, is the "no heat" part of it. run an engine on hydrogen, and you can be sure it will make heat. Is the sun hot? (I know thats a bit different, but you get my point)