Can you provide a citation or a reference to a document that presents this or otherwise point to a source? Thanks.
There is a reason I ask this question.
Water Tunnel 1 is nowhere near the path of the projected tunnels 5 and 6. You are probably confusing yourself with the recollection that eastward construction from the earlier ARC deep station under 34th St was blocked by Water Tunnel 1. But that is history, long gone and hopefully forgotten.
The main problem for breaking out to the east from NYPSS is the 7th Ave subway and the 6th Ave subway and PATH tunnels, both of which slope downwards to the south and are a little deeper at 31st or 30th Sts, than at 32nd and 33rd St.
This was discovered in early planning and according to folks at Amtrak NEC Capital Projects (Drew Galloway - now at PB), they changed plans to make the NYPSS tracks (and hence platforms) at a slightly greater depth (~10-15') than the rest of Penn Station so as to be able to needle those tunnels through the maze to the east that it has to pass through while staying within the ruling gradient limits, if and when they get built. Right now there is neither any plan or funding nor any EIS to do so.
Incidentally it was also Drew Galloway who spearheaded the entire effort to build the approach tunnel under the West Side development to preserve an entry into Penn Station from the projected new Hudson Tunnels.
As for Penn South becoming the main Amtrak station, that is pure speculation based on not much.
Incidentally the grand visionary plan for Penn South also has a four track very deep station under the same Block 780 in a bored tunnel, for use by High Speed service. This is deep enough to not interfere with Tunnel 1, and involves all sorts of additional under river tunnels, and hence unlikely to see the proverbial light of the day.
Maybe you are confusing that part of the draft document with the 8 track Penn South that Cuomo is talking about?