I've heard a story about Sai Baba lighting lamps with water. Could you recount the events of that miracle?

Certainly. This miracle is detailed in Chapter 5. Sai Baba had a great fondness for lighting lamps and would daily beg for oil from local shopkeepers. The grocers, growing tired of providing oil for free, conspired to refuse him. When Baba came on his daily routine, they all turned him away. He returned to the mosque, took his tin pot which had a tiny bit of oil, poured water into it, and drank it as an offering. He then filled the lamps with plain water, and to the astonishment of the grocers who were watching, he lit the water-soaked wicks, which burned brightly all night long.