Steam powered what

steam driven water pump used for draining a section or lock

Agreed

My guess is a steam powered pump emptying either a lock or a stanked off session for maintenance?

 

Zenataomm

The narrow boat, appears to have a semi, or portable, steam engine in the hold and it looks like it is pumping water, perhaps from a section staunched of from the rest of the canal.

Steam pump boat, I think. A similar one (originally built for the Grand Union) was used on the Stratford restoration to pump out the locks on the Wilmcote flight.