I use a misting system that is almost identical to the one pictured in the Amazon link. I do not use anything other than water, no Kool Mist. I also am running it on a small pancake compressor and I have no issues at all. There is no rust buildup on steel, even if there was it is only surface rust and comes off easily enough....you're handling it while grinding. I have no issues with water rusting my grinder, either, but it is painted with Blue Hammerite type paint (TW-90), and the mist doesn't really reach that far, just on the platen, straight onto the blade. I use 40 psi on the output with the pancake compressor, but it does cycle on/off more than I would like. But it's only a $100 compressor under warranty. So far so good!
Now...belts. Not all are the same. My experience has mostly been with Blaze Ceramics. Then makers starting swearing by VSM ceramics, especially for the price point. I ordered a bunch of them in 50 grit and 120 grit and for me, all they do is generate heat after a handful of passes. They work fine for me with annealed steel and other materials, but I cannot get them to work well with hardened/tempered steel. 62HRC AEBL, which grinds pretty easily, killed my VSM 50 grit belts pronto. I ordered more 50 grit Blaze ceramics and not looking back. They cut better and are much cooler.
