So what you are saying is that: Health Drop = Armor Drop * 10, right?
Very close to that. 10 * Armor Damage, then subtract 1-10. Or, if you will, range of 10(AD-1) to 10*AD-1. With exception that it can't be less than 1 for AD=1. And excluding cases where armor was totally blown out. Here's the data:
Armor Min Ave. Max
Damage HPs HPs HPs N
0 0 0.00 0 12 <- top line was in blast radius
1 1 5.13 9 39 and did get "hit" experience
2 10 15.14 19 44
3 20 24.51 29 37
4 30 34.25 39 32
5 40 44.27 49 22
6 50 54.39 59 23
7 60 62.43 66 7 <- starts breaking down here
8 70 72.14 79 7 due to lack of data... I was
9 83 85.50 89 4 trying to sample edge of
10 91 91.33 92 3 blasts, not center
11 107 107.00 107 1
It's based on damage from a single explosion, but some preliminary testing vs. shots shows that it holds true for shots, too. It was for mutons and silacoids, in case that matters.
Note that you cannot get this precise estimate if you compare armor damage to health damage after several hits or shots. E.g. at the edge of std. grenade blasts you can take several blasts that only do 1 or 2 health damage each and 1 armor damage each time, and wind up with 3 armor damage but only 5 HPs gone. But if I look at each hit individually (before and after), I see it every time. So far, anyway (fingers crossed). Anyway, it holds for all explosive damage, and light weapons. Don't see why it wouldn't for heavy weapons.
Here is something I put together that ought to be of interest one way or another. A secondary check, if you will:
DFE HE MinHPs AveHPs MaxHPs N
1 Gren 0 1.27 5 15
AC-HE 0 2.50 8 10
HC-HE 2 7.90 22 10
SR 8 23.33 42 15
LR 10 24.80 48 15
BB 37 79.44 125 27
2 Gren 1 11.60 20 15
AC-HE 4 12.10 21 10
HC-HE 7 21.10 37 10
SR 12 33.60 57 15
LR 15 36.60 60 15
3 Gren 5 18.47 34 15
SR 17 43.40 70 15
LR 20 47.12 73 17
4 LR 30 60.50 91 2
5 LR 30 56.50 83 2
DFE = "Distance from edge of blast", where just outside the blast radius is 0, and just inside is 1.
Sorted on ascending distance from edge, then ascending average damage by bomb type. So damage goes up quickly as you move inward (higher DFE). This test data only applies to Muton Soldiers hit on a side (not close enough for underarmor), in Desert terrain. In my game, Muton Soldiers have stats of 10 for side armor and 125 HPs. (Armor differs by game difficulty, doesn't it?) Armor breakthrough and damage that killed is included in this table (but not the first one).
I only tested Blasters at their edge because I figured they weren't what I was after... also note they were the only one to kill Mutons outright. And that's at their edge.
My Ns are very small, but they showed me all I needed to see: the edges of std. grenade blasts are probably the gentlest hit possible in the game (for which you can get experience - correct me if wrong!). It is entirely possible to have every man on a team get lots of hits from Mutons, probably the 11+ needed for max stat increase, for every soldier. If combined with the fact that Mutons can easily give you all the reaction shots you need (with std. pistols)... well, you can see where I'm going with this. But it may be too much of a hassle for anyone but the most dedicated to bother with. (Not hardly as much fun as pure firing squads, and they do take some time to set up just by themself, already.) Anyway, I'll be mulling it over. At this point it's looking like there's not gonna be a free lunch hidden away.
NKF and Z, I played with incendiary some... and, yep, never got an experience point for 'nothing. Not unless my tank (slot 0) is eating up unattributed hits.
Z, I just saw your new post... that sounds about concerning Health Drop, but don't make me try to remember how to get Int(rnd*11) to work just right... will that have a min of 1? Anyway, I posted up the actual data...
Speaking of which, look what you just pasted up! It'll take me a little while to think what all it implies, but basically... it looks SWEET!

Looks like you found the "missing link" as to how it "decreases by 10", but still does substantial damage. Gotta love it when things fall together. Thanks!
Got a url for your old equation? I wonder how readily the results might be extended to other HE types.
As for "hard wired to detonate", you can sort of see a couple things through the mist. If the AVERAGE blast strength is 200 (as it is for you at GZ) and it decreases by 10 per tile... since there's no reason for the game to give everything away on its Ufopedia screens, I'd say they did a pretty good job of saying how it works, without going into all the details, eh? There's a lot of variability in other damage equations and e.g. the double damage and weapon susceptibility things, shrug.
But wait... why are blast radii different sizes? Hmm...
Getting late here... great stuff!