I am quite skeptical about the insecticide, herbicide and fertilizer arguments, as I said before. You can see the entire US production of that stuff (I have to find the link, but you could probably just as easily google the same link I did). I think it was the EIA, which is looking at the total energy consumption put into producing that stuff. The vast majority of the fertilizer put into corn is anhydrous ammonia because corn responds very well to nitrogen, and only up to a point with Pottasium and Phospherous. Ammonia does not run off easily, as might be the case with, say, Urea or other nitrates. Most of your insecticides are used on fruit crops, not corn, and modern corn crops are more resistant to weeds and insects intrinsically. We've gone over that in the other post, so nothing new so far.
On the pollution from the distillation process, there are other ways other than the LNG or coal. Some designs use crop waste (like corn stalks) for heat.
As far as ethanol in an outboard motor, it shouldn't make any difference if you use E10, and E10 has been around for a long time. If manufacturers didn't meet the spec, they should get the wrath of their customers. If the customer put E85 into a standard outboard, they are knuckleheads, plain and simple. The complaint you listed there is consistant with fuel-system problems you see with putting E85 into a conventional engine--if you do it regularly, it will eat the seals, the fuel tank material, etc. I could also see how making an outboard engine E85 compatible would be tougher than making a 4 stroke E85 compatible because the fuel circulates in the crankshaft with the lubricating oil before combustion. Ethanol is loves water, so I think E85 and boats are a bad idea anyway.
Butanol, on the other hand, would work "out of the box" with regular gas engines with no modifications, and should work fine with outboards as well. Butanol is also hydrophobic, like gasoline, so it won't absorb water. Butanol is also less energy intensive to distill from the water for the same reason. Butanol clearly has a lot of advantages.
I still maintain that ethanol, including corn ethanol, has a role, at least in getting the ball rolling, but you are right--we don't want to give them a free pass to relax their pollution standards, etc. to do it.

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RE: Don't Get Carried Away
Ah..I found the article in Fly Rod and Reel that I referenced some time ago, it can be found here.
Some quotes on the cost/environmental issues:
On Being Corrosive to Engines:
We need to be cautious about ethanol--and more cautious about corn ethanol.
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