Just offering up my experiences with lead smelters. Cuslog, if you keep your discharge spout short & real close to the heat source( by close Im meaning still in it if possible) the small discharge orfice you are using will work but if you try to discharge out to the side of your pot (much safer & easier to control muffin pans) you will need at least 1/2" outlet, anything less will freeze off in very short order.
My smelter has a similar pointy needle valve set up and after a couple of "preliminary versions" I settled on a system that the needle is absolutely condoled from opening to closing by my hand, when i wish to shut the stream off I can put a lot of pressure on that point for a positive shut-off. My pot will easily hold over 40 lbs per melt (but for safety reasons I try to limit to not over 20 lbs) and a leaky valve would get very dicy in a quick hurry.
The thing does work quite well at its present version, Craig & I did close to 200 lbs from lead pig to muffins in less than 2 hrs a few years ago.
And yes water of any sort in a lead melt will invite a visit from the tinsel fairy instantly...and put more 700 deg. heavy lead in the air quicker than you can even think of moving out of the road. When that lead explodes (and it does very violently) it will throw tinsel 30 ft in every direction....not fun to cleanup and even less fun to be in the middle of one.!!
I may have to get mine out before fall yet, I have 2 five gallon pails of WW (unsorted as of yet and will contain large amounts of zink I'm afraid) about 300 lbs of pure lead water pipe to smelt down...that water pipe is going to be a chore as it is just crumpled up a bit and still contains water...will have to start each melt from a cold start for that stuff.