This will probably seem like an easy one for most of you but I can’t get my head around it. I have been reading that if you are going to brew with canned pumpkin, you should try to get as much of the water out as possible. The reason being the high water content will lower your OG. If you are extract brewing and adding top off water anyway, how does the water content of the canned pumpkin lower you OG?
You’ve got it right. If you take 5 gallons of finished wort ready to ferment and add pumpkin (or pretty much any fruit) it will add volume and usually OG will decrease. But if you compensate for the added volume by decreasing water somewhere else in your process then you’re final volume will remain the same and OG will increase due to the extra sugars.
I had never even considered that. Does the additional water in 2 lbs of pumpkin really effect the OG that much?
no, the overall effect, if mashed seems to be between 1 and 8 gravity points addition so the water mostly just cancels out any additional sugars added by the pumkpin.

I had never even considered that. Does the additional water in 2 lbs of pumpkin really effect the OG that much?
Canned pumpkin is roughly 90% water, so that’s a little less than a quart, or about 4% of a 5-6 gal batch.