“Hi Paul. I hope you are not too nationalistic because I am brazilian and I would like to take part in the exploration of the solar system (and beyond) hopefully using the M-E propulsion system.

Not that Earth nationalities will have much importance once the final frontier is open.”
Anybody with a common interest in the exploration and colonization of the universe by humanity, and for the betterment of same in my book already has a ticket to ride the M-E express! That is the major reason that Jim W and I have kept the communications lines on this M-E work open to forums like NASASpaceflight.com.
“Anyway, technical questions aside... looking back, do you guys have any regret about ever mentioning in papers (or even in internet forums!) the possible APPLICATION of the M-E effect as a propellantless field propulsion system? Has such an "outrageous" idea affected support and even worse, funding on the research?”
In regards to getting research grants the answer is a yes. However there is no point in backing away from what this research is all about and that is overcoming the tryanny of the rocket equation! That is why Jim and I run our respective R&D shops from our own resources and on our own time lines for it gives us the freedom to do and publically say what is right instead of what is politically correct.
“Don't hold your breath. Paul March has a day job, Woodward is still battling lung cancer, and neither are funded properly. I wish the Advanced Propulsion Concepts group were still together and that they would write these guys a nice $2M check every year to conclusively demonstrate the effect.”
Only when pigs can fly... Sorry for that one, but getting funding for this type of bleeding edge R&D work has proven near impossible to obtain. I guess it's because if we are successful, many a sacred cow and career is going to get gored, at least the critics of this work seem to think so. Be that as it may, Woodward has set forth a very rational, "no new physics" approach to his "origins of inertia" and Mach-Effect conjectures based on Dennis Sciama's initial work in the 1950s and 60s on the origins of inertia question, Lorentz invariance, SR and GRT, with the last three elements being accepted theoretical physics constructs by most practicing physicists. The only thing new that Jim W derived was the gravinertial transient terms that are hidden away in Newton's third law, and the recent possibility of reworking the particle physics “Standard Model” into a rational and non-contradictory theoretical construct that finally takes into account the origins of inertial mass for elementary particles for the first time. These M-E gravinertial transient reaction terms can be as large, or larger than the forces that create them. And they appear to be engineerable for propulsion and other yet to be determined purposes as well. Getting to the M-E demonstration phase though has taken much longer than one would have liked due to the lack of reliable M-E analysis tools, engineering implementation details, and available time, but until we can float an M-E test article into the conference room, or at least run it across the air-hockey table under RC control, we are stuck pushing the M-E cart forward using our own resources on a time available basis.
BTW, Jim W. is building up a new more robust shuttler test article as we speak, and I'm building up a new Mach-Lorentz Thruster (MLT) prototype based on some N4700 COTS caps that should produce at least an order of magnitude higher thrust than my last successful test article, the Mach-2MHz, which generated up to 0.5 gram-force, (~5.0 milli-Newton). As to when these new test articles will see first light, my guess is sometime this summer, barring unforeseen time sinks at work for me, or health issues with Jim. (Jim W. is currently in remission from his lung cancer at the moment. Let's us hope that it stays that way...!)