I think that the answer to my question lies not only with the meaning of the Holy Spirit, but also the meaning of baptize within the context Jesus was speaking. For the Jews, baptism had a very specific meaning. It was a purification ritual, meant to cleanse, to wash away unclean passions with holiness.
Initially it was thought that spirits lived within bubbling springs. Immersion was a way to contact the spirit. Bubbling springs led to running waters which were living, not stagnate. John baptized in living waters. Mikvehs used for purification rituals usually contained living, moving waters. If we keep the symbolism consistent, one might naturally conclude that the Holy Spirit could be the living water within the soul. At least that’s one way to look at it.
The Holy Spirit within the soul, being the supermind, a giant purifying mikveh, is the supporting arena in which we have our relationship with Deity. In a sense we become immersed in spirit whenever we attempt to enter the “dim realms of embryonic soul-consciousness in a wholehearted effort to reach the borderland of spirit-consciousness—contact with the divine presence.” (196:3.3)