That is funny and exactly opposite to what we have found here on the dyno. On one test we switched from C12 to E85 from the station across the street and found 25hp with no changes to the timing. I love the stuff because the jetting is more stable, when you find peak power and add more fuel it usually does not drop in power for several jet sizes then if you set the engine up to run at the middle of the jet spread it will not be effected by outside temp as gas is.
For me there is no down side for E85, it is a no brainer. You did touch on A/F for E85 and gas but are off on the numbers a little.
Air/Fuel Ratio Gasoline E85
Stoichiometric 14.7:1 9.7:1
Max power 12.5:1 6.9:1
Max poower 13.2:1 8.4:1
Most A/F gages also read in Lambda and that is the scale you should be using either anything other than Gas.
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