Sorren - I think your experiment is quite interesting and it certainly has piqued my curiosity....so, I consulted with an expert who had this to say:
"I would suggest that when he reckons the taste is acceptable that he puts the spirit back into bottle so no further wood extraction happens, but never fill the empty cask with water of any sort as that ruins the flavour of the wood and makes any further fillings smell like rotten wood. Apart from losing a large angels share the strength will most likely drop and if it drops too low then the whisky will always look cloudy."
Tell me more about your barrel - is it new oak? Has it been conditioned?
This is interesting, please keep us posted!