I have used a mix of 3 gal of used "veggie" oil (could be canola, peanut, cotton seed, corn etc.) filtered trough a 12 micron filter mixed with 2 gal gasoline. I have run this in my 2000 F250 7.3L many many times when gas/diesel prices get high and have had zero problems.
Now I change my fuel filter freqently and live in TX and don't do this if the temp drops below 50deg F. I also use Lucas upper cylinder lube and cleaner on a regular basis. So if you try this and it detroys or damages your engine, you voluntarily chose to do this!!
OK, MY question.
Could E85 be sustituded for regular unleaded gasoline without seal failures or swelling causing leaks? I'm not a chemist, but it would not be run full strength (E85) through the fuel system. Its cheaper than gasoline, but is it worth the savings of having to replace all the o-rings in the fuel system?
You are blending gasoline at 40% with WVO at 60%. This is a little high in my opinion. I blend gasoline at 20% and find my fuel remains liquid down to 0F (-18c) and my 6.2L engine starts right up at that temperature without the need of a block heater. So, you could save some money and cut your gasoline addition in half, and still have a perfectly functional fuel.
On your alcohol question:
Most gasoline in the USA seems to come with some amount of alcohol in it, and it does not seem to be causing problems with blenders. I have used e-85, and found it blended OK. But, seal and hose failure is certainly a potential problem. One can only find out if there is a problem by doing it, and being prepared to replace your hoses and rebuild your injector pump to find out.