I have been battling with the same issue. My combustion engines keep explodin even though they are fed with sufficiant amount of water. However that might be a bug with the engines themselves, because the water flows in properly then after a while the engine stops accepting water and the only way is to pick up and replace the engine.
1) Yes, always.
2) Have no engines running any more so can't test it atm and the log did not reveal anything from previous explosions.
/Swiftwork