irnsrgn,
I might suggest that teh air pipe be closer to the floor of the hearth than a few inches. The side blown forge we have at Ft Vancouver has the pipe almost on the floor. Then the ducks nest starts about 2 inches from the tip and goes down as you said. Then the back wall of the nest actually is higher than the pipe. acting as a sort of back drop.
Also we have a water cooled nozzel. Made from 4 inch outer pipe with a 1 inch inner. Has been used pretty good for about 6 years and there is no degradation so far.