Had a leaky coil before - it pours water out as @carbon says. I managed to get a replacement boiler off of ebay complete with coil thankfully as I think that would have written off the hot water side looking at new prices.the contraption is not much different from your central heating boiler - too much air normally just means for lost heat and an unstable flame.
im guessing you would realise if you had a leak in the heat exhanger, and what you were seeing was steam? but you also said it smells of diesel, so possibly not.
kerosene would burn easier, but, if your existing jet is for 35sec, 28sec fuel will possibly end up being a bit adventurous.
might be worth a quick go in testing though
I have run it on kero before but now I have the tractors I have plenty of red diesel so will stick to that as I think thats what its meant for!



