"The system has been used to power a Vespa scooter with distilled water. "
bit was a dead giveaway that the story is bogus.
The whole scheme depends on electrolytic dissociation of water to yield hydrogen and oxygen. The resistivity of distilled water is too high to support electrolysis. Tap water works much better -- and if you toss in a little table salt, electrolysis really "gets cracking". (Pun intended...)
