Ian, Sal, this comes up occasionally with respect to mixing XTOL. What I've never understood is - XTOL contains an Iron sequestering agent. So why would a small amount of Iron in the water be a serious problem? I can see how it would be a problem with home-mix ascorbate developers, but it shouldn't be an issue with XTOL.
Also - Sal - regarding steam distilled being better than deionized for XTOL, actually I recall Gerald Koch saying it could potentially be the other way around if the steam distilling apparatus introduces Iron into the water.
Just thought I'd throw that extra wrench into the XTOL/water quality debacle.
All the reports of rapid failure were in the early years of Xtol production, Kodak must have made it more robust. Xtol keeps just as well as any other powder developer.