Would need a bit more info on what LPG system your S60 has fitted, do you know what the system is? Or is this a factory system?
You mentioned water leaking into the gas via a leak in the reducer, possible but very unlikely. If there is such a leak it would be far more likely that gas would leak into the water and presurise the cooling system but you haven't mentioned related issues. Water in the gas wouldn't cause a higher idle, neither would gas in the water, the latter often misinterpreted as a head gasket issue.
A more common type of reducer leak, one which cold potentially cause the kind of symptoms you're seeing, is if the reducer has a leak which allows gas to exit it's vacuum connection - Effectively such a leak would cause the engine to run rich at idle and low loads. When the engine is idling high on gas, does the exhaust smell rich?
It is true that if there is a problem with your ICV (idle control valve) these sorts of problems can occur on one fuel more than the other. Also, depending on what type of gas system is fitted, the TPS (throttle position sensor) could cause the same.
Simon
www.Lpgc.co.uk