OK, lots of guys have moved to E85, nothing new there. I think if you read and learn from what they've done the biggest issue they have is having to keep re-tuning, sometimes daily. That's because E85 is rarely E85 in your tank. E85 becomes E70 in the winter months so for a while each spring and fall its not even E85 or E70 in the stations that sell it but something in between. That same constant mixing and dilution happens in your gas tank and messes with your tune. Having AFR targets and a wide band helps because lambda is lambda whether you're running straight gas or straight alcohol so if your fuel trim is flexible enough it can take care of smaller variations. That's what the government is saying when they announced last week that late model cars can handle E15 without problem, the trim is wide enough to adapt. But there is a way better solution, GM and Ford both supply them:
The flex fuel sensor, it constantly measures the refractive index and temperature of the fuel which indicates the ethanol concentration and reports it to the ECU. These are getting common in the junkyards now and on ebay where you can pick up a new one for about $300 or a used one for $100 or so.
So, what good is it unless you have a GM or Ford ECU? Hah! Megasquirt is already set up to read and run one! You do need an MS-2 processor as the MS-1 is already maxed out with features and has no room left.
You can program a linear fuel addition based on frequency output from the sensor (ethanol concentration) AND a linear spark angle or advance addition. You can or need to run more advance with increasing ethanol concentration as it burns slower. Adding this to an MS-2 is cheap too, less than a buck for the resistor and wiring required.
I mounted my flex fuel sensor on the drivers side fender, it needs to be part of the fuel circuit so I've got mine post-fuel rail in the return line. The fuel line is rated for ethanol so that's not going to be an issue but the flex line from the pump to the steel factory fuel line may suffer, I plan on replacing that with the same braided flex line I used from the factory steel fuel line to the fuel rail. Since I was installing the MPI system it was pretty easy to install but I think putting one on a TBI would be straightforward as well. Hopefully this thing will be running shortly and I can report how it all works.