No, it's not the mixture setting, it's the fuel flow. While in many circumstances the fuel flow is a reasonable surrogate, it isn't here.
Sorry, I'm not sure why I just wrote that! haha. Of course it isn't the mixture setting as mixture is a fuel/air ratio.
Not so. The pumping losses, or exhaust backpressure as it puts it in your extract on the second page, is a real effect that changes the efficiency of the engine. At higher altitudes, you get more power for the same fuel.
If you're feeding your engine a certain amount of fuel, you will be able to do a certain amount of work due to the energy contained in the fuel. When the engine is creating 65% power on the ground, it is putting say 50% power to the propeller and 15% for pumping losses. Those number are made up. When you go to 8000', if you're at the same fuel flow (20GPH) and mixture (0.08), you will create the same power. Now, two things to discuss:
1) Due to the decreased temperature, keeping the same manifold pressure will provide increased density air to the engine. Depending where the mixture setting currently is, that could create more power or less power. By reducing the MAP, you create the same power from the quantity of fuel.
2) Due to decreased back pressure at altitude, there are less pumping losses, resulting in more power available for the propeller. So now, it would be say 55% power to the propeller and 10% for pumping losses.
The following two reasons contribute to a higher TAS at altitude in this situation. 1) You are pushing more power to the propeller which is able to take a bigger bite of the air. 2) The decreased atmospheric density at altitude will create less drag for a given TAS.
The manufacturer could have chosen to relate the charts to what the actual power going to the propeller is but relating it to the quantity of fuel the pilot/hard-working-owner is pumping into the engine is probably easier to calculate and simpler for the pilot to understand.
So you can reduce the power in two ways: you can reduce the MP to maintain 65% power, but that will reduce the fuel flow below 20 GPH.
I don't believe so. Say, at SL, 20GPH, 0.08 fuel/air and 20" MAP you create 65% power. If at 8000', 0.08 fuel/air and 20" MAP you will be creating more power and to do that, you need more fuel flow. Both the power and fuel flow will be higher in that case. You could lean it back to 20GPH or lower, but that would change the fuel/air mixture. To get back to 65% power, you adjust the throttle (decreasing it to lower the MAP)
and adjust the mixture so that when the mixture is equal to the one at SL, the fuel flow also equals 20GPH. At 8000' it would look something like this: 20GPH, 0.08 fuel/air, 19.1" MAP and 65% power.
But it's not easy to calculate what the corresponding MP is.
That's why the manufacturer's do it for us and put it on nice charts!