How does ethanol in gas affect 356 engine/fuel system?

[Brian R Adams]

...oh, the av gas, does Not have road taxes added, thus, technically not legal...

Legalities aside, the most salient feature of AvGas, aside from its 100+ octane rating, is that it still contains lead. The FAA, in partnership with research and industry entities, is in the process of developing unleaded formulations, but AFAIK it's all still leaded. I'm under the impression leaded fuel could be deleterious to our rebuilt engines.
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[David Jones]

Lead is a very bad contaminant especially to oil and more so to synthetic oil which cannot absorb it so it precipitates out and can lead to serious problems which is why it was removed from the aviation market. Mike Horton could comment on that.

[Brian R Adams]

Lead is a very bad contaminant especially to oil and more so to synthetic oil which cannot absorb it so it precipitates out and can lead to serious problems which is why it was removed from the aviation market. Mike Horton could comment on that.

I had been reading an FAA web page wherein it states lead is still present. Perhaps they're behind in page maintenance. It didn't suggest any unleaded avgas is available yet.
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[Mike Horton]

The prevalent avgas fuels today, are for on the order of 5 decades, termed "low lead", and yes, there has been a push for a universal aviation fuel. Factors are the octane required for what are considered high compression ratio, 8.5-9:1, VS the lower power rated training engines, and the many previously "FAA Approved" build specifications, through history, the resolutions for which are the challenge, between the FAA, and the engine manufacturers.

... a sort of "bean counter, engineering, and federal approval authority issue,"... what could possibly be the problem... ?

I sent Harry Pellow the lead contents of the various av gas in use back when he was writing his books.
There is a vapor pressure differential, as well...

[Mike Horton]

Oh, there are a few "auto gas" supplemental approvals, each very specific to each covered airframe, with each specific engine installed, primarily for lower powered, under 7.5:1, and to be used under detailed parameters.