On the Germans having to do with less than 100-octane aviation gasoline:
The lack of high octane gas was a serious problem certainly but it restricted power output in the early days. The Germans made up for some of the loss by using larger capacity engines and by formulating their gasoline differently (German 87 Octane was roughly equivalent to British 91). The methanol-water chemical boost was primarily to offset the inability of the Germans to produce adequate superchargers; the nitrous oxide booast was intended to offset the lack of turbochargers by adding extra oxygen to the mix. MW-50 water-methanol added around 150 horsepower to output, GM-1 nitrous oxide added about 360. After using them, one threw the engine away, it was burned out.
On the Germans running out of strategic materials for their engines:
This was the really big one. The Germans lacked a large number of the vitally needed alloying ingredients for their engines and the part suffered accordingly. Crankshafts, cylinder blocks, all the high-stress engine parts had very short lives (made worse by the chemical boost where used). Exhausts rusted like crazy. A lot of German engines used plated mild steel where the British and Americans would use high-temperature resistant steel alloys. In some senses, that didn't matter because the German aircraft didn't survive long enough for their engines to blow up.
More Details on MW-50:
MW 50 was sprayed into the supercharger primarily to allow the use of increased boost pressures. Secondary effects were cooling of the engine and charge cooling. Higher boost was only effective at altitudes below the full throttle height, where the supercharger could still provide additional boost pressure that was otherwise wasted, while the smaller secondary effects were useful even above that altitude.
The effect of MW 50 injection could be dramatic. Simply turning on the system allowed the engine to pull in more air due to the charge cooling effect, boosting performance by about 100 hp on the BMW 801. However, in theory, the MW 50 also allowed the supercharger to be run at much higher boost levels as well, for a combined increase of 500hp (in reality that was never attainable due to the engine falling apart). At sea level this allowed the 1,600 hp engine to run at over 2,000 hp. MW 50 was effective up to about 20,000 feet where its benefit had dropped to around 4 percent extra power, due largely to charge cooling. Aircraft generally carried enough MW 50 for about 10 minutes of use.
The primary problem with MW-50 was that it caused micro-cracks around the cylinder heads. It also caused problems with engine lubrication; apparently over-using MW-50 caused the lubricating system to break down and the engine run dry. There is also references to pistons burning out and big ends suffering damage as a result of MW-50 use. Apparently MW-50 was pretty rough on spark plugs as well.
