I see the hulk Cretehill is still there (sharp right) with the shed on her deck. Lidden Estate was well advanced. Cretehill was bombed in 1940. I would say 1939, from looking at other pictures of the harbour.
The Luftwaffe bombed Newlyn in February of that year, reported as a Cruiser sunk, but, as you say, LHH reported a battleship. If you are going to tell a lie, tell a good one.