Falling into water after losing control over your body (which commonly happens shortly before loss of consciousness) doesn't look like a good idea for me, because you lose control over your respirations too and some amount of air can be accidentally inhaled then, worsening the progress of anesthesia. I think, it would be better if submerging happened while holding breath with the lungs filled with N2O.
I doubt that you can wake up without a sufficient oxygen delivery to the brain. Theoretically, hypoxia may cause dilation of the cerebral blood vessels, and maybe there is a possibility that brain could better obtain oxygen from blood with low oxygen saturation then. This is the only mechanism I know that could reverse the hypoxic effect to some degree.
As far as I understand, hypoxic unconsciousness works as general anesthesia rather than normal sleep. The commonly accepted classification describes 4 stages of anesthesia
Stage 1 - Induction (Analgesia or Disorientation)
Stage 2 - Excitement or Delirium
Stage 3 – Surgical Anesthesia
Stage 4 - Overdose
F. Hewitt described a similar classification in his book about anesthesia
1. Stage of analgesia
2. Stage of light anaesthesia
3. Stage of deep anaesthesia or narcosis
4. Stage of bulbar paralysis
see pages 52 - 56, 243 - 247, 278 - 280.
Stage 2 corresponds to early unconsciousness. In this stage, your body can vigorously react to painful stimuli due to working reflexes, but your awareness of pain is very limited and you can't be really woken by disturbance.
Stages 3 and 4 are perfect for CTB, because your sensitivity to stimuli is completely lost, but I guess, it would take 2 - 3 minutes to reach the 3rd stage after the very limited administration of N2O you can realistically carry out before submerging in water. Once you stop breathing with N2O, the concentration of O2 in the lungs will grow, as oxygen will be released from the blood through the alveoli. Therefore, the rate at which the blood will lose oxygen will decrease in relation to the initial phase when N2O nearly completely displaces O2 from the lungs.
I wouldn't guarantee complete unawareness, since you probably start to inhale water while your unconsciousness is still shallow, but it's probably noticeably better than experiencing drowning being in full consciousness. I think, the best tactics would be making 3 maximally deep inhales of N2O (it's likely that you won't be able to carry out more than that because of fainting) and hoping for the best. If you're too anxious about the procedure, this may worsen your feelings later in the process of CTB.
Yes, your respirations will likely start even before you lose consciousness completely. There are high chances of laryngospasm occurring at this stage, because your airways become especially sensitive to stimuli. Then inhaling of water may be suspended till relaxation of the corresponding muscles happens (probably upon reaching the 3rd stage of anesthesia).
You probably can have a bad dream about drowning, but waking up is unlikely, in my opinion.
7 x 8g chargers contain the amount of gas that would expand to approximately 30 liters of N2O at room temperature.
N2O is known to suppress feelings of suffocation, there are researches about this effect (you can find them if you inspect the links above kindly provided by other user).
You're the first person who reported nausea from N2O here. How much did you inhale and for how long? By the way, you'd likely experience similar nausea from sodium nitrite poisoning (which you consider as an alternative method) as well, because it induces hypoxia for a long period of time before LOC, that you can't shorten much, in contrast to the case of gas asphyxiation which can produce LOC in less than a minute and the stage of surgical anesthesia in 1 - 3 minutes.
The nuance with tongue was mentioned as a safety precaution for testing the effects of N2O before the actual CTB procedure (in case if you don't want to die while testing the gas).