Breathing Liquid - Is it possible for a human to sustain himself or herself while breathing liquid and if so, why would anyone want to? The surprising answer is yes, not only is it possible but it has been done for quite a few years. In 1920 Winternitz and Smith demonstrated that human lungs can tolerate large amounts of a saline solution without damaging them. In 1950 it was suggested by Stein and Sonnenscheim that you could keep an animal alive that was was submerged in an oxygenated saline solution. In 1962 Krysla was submerging mice in the above solution and they were showing short term survival. The break through came in 1966 when Clark and Gollan starting using perfluorocabons(PFC). They submerged mice and the mice breathed in the liquid. After keeping them in the liquid for some time they returned them to normal breathing and the mice were fine.
What is a PFC liquid - PFC liquids have 1/4 the surface tension, 16 times the oxygen solubility and 3 times the carbon dioxide solubility of water. Since Oxygen and carbon dioxide dissolve so easily in this liquid it is excellent for carrying oxygen. The liquid spreads the oxygen much more quickly than gas.

Two areas where liquid breathing would be the most helpful are underwater operations and medical applications.

Lets talk about medical applications first.

80,000 premature newborns are delivered every year that have severe respiratory disorders. Many of these children have under developed lungs. Liquid breathing is able to relieve their stress by delivering more oxygen and delivering it better. The same holds true for 300,000 adult patients who experience breathing distress every year. Over 10,000,000 people in the U.S. have chronic obstructive pulmonary disease and it is now thought that liquid breathing may be beneficial to these individuals. It is beginning to look as if this therapy will work on almost any type of breathing disorder.

The advantages of breathing a liquid while deep diving are undeniable. When a diver goes below 120 feet Helium, substituted for nitrogen in "mixed gas diving," can cause an effect called High Pressure Nervous Syndrome. This is also known as Gas narcosis. It caused by nitrogen in normal air dissolving into nervous tissue.
Gas toxicities caused by oxygen and carbon dioxide. The damage of oxygen to the lung and brain will vary with partial pressure above 1 atmosphere and time of exposure and is a concern when the molar fraction of oxygen is increased, as in NITROX diving. The effect of carbon dioxide changes from a respiration stimulant at normal partial pressures of 15-40 mm Hg to a respiration suppressor above 80 mm Hg.
Pain due to expanding or contracting trapped gases, potentially leading to Barotrauma. This acute symptom and potential damage can occur either during ascent or descent but are potentially most severe when gases are expanding.
Decompression sickness [DCS] due to the evolution of inert gas bubbles, in vivo. Acute symptoms of DCS can occur during a decrease in pressure, but they occur most commonly soon after the ascent has been completed.
Dysbaric Osteonecrosis is detectable bone lesions most commonly on the body's long bones. Although its etiology is unknown, this chronic disease may be related to the evolution of gas bubbles that may or may not be diagnosed as a decompression sickness.
As you can see there are a lot of hazards associated with breathing gas. Administratively these may be controlled by limiting times at the lower depths.
At 300 feet of water the pressure is 10 times that of sea level. The dive time is limited to 5 minutes, if a diver were to stay down any longer, he risks decompression sickness. A rather hairy technique used to over come this is saturation diving. A diver goes down to a depth, perhaps 300 feet, and remains there until no more gas can dissolve in the tissues -- the tissues are saturated with nitrogen. Once the saturation point has been reached, the time required for decompression will be the same no matter how much longer the diver stays at that depth, whether it be a minute, an hour, a day or a week.
With Liquid Breathing no gas phase is in contact with the blood, and nitrogen is not used, the danger of forming nitrogen bubbles does not exist. In the 1960s, it was shown that rats could survive for up to 20 hours when immersed in such a mixture. Potentially, liquid breathing could allow a diver to reach depths of up to 3000 feet (914 m). Liquid breathing also equalizes the pressure on the lungs.

There may be some uses for liquid breathing in space but this doesn't seem to have been researched much.