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Emily's account is very interesting - and for the moment it is one of the things that encourages. I don't see it as evidence at all. The photo may be evidence - for now though it is just a strong clue, as I see it. Strong enough that the search is in motion apparently - as seen by those who make such decisions, so we are soon underway. 
LTM -
G'day Jeff
Indigenous testimony is always tricky especially in this case where we are dealing with testimony from people who are not themselves indigenous to a place. There are a lot of questions concerning the origins of stories and beliefs in such a society. The Nikumaroroans as we know came as settlers in the PISS initiative to relieve population pressure in the Gilberts. The island itself seems to have been considered a bit marginal from the beginning because of the potable water problem - droughts combined with a rather erratic fresh water lens. This being one of the reasons there appears to be little or no prehistoric interest in the island.
So if we are considering the reliability of testimony from the population especially in regard to events before their arrival and also quite outside their normal technological understanding then we have to tread carefully. There is the notable Ghost Maneaba story
http://tighar.org/wiki/The_Ghost_Maneaba which to me clearly indicates that the Gilbertese migrants are trying to create some sense of belonging on Nikumaroro that fits with their traditional ideas and beliefs.
Then we need to consider that the Gilbert Island people may well have had a previous tradition about Earhart and aircraft. This is not as far fetched as it seems because the Gilbert Islands, as recalled by Vidal, were considered by Earhart to be an alternative landing spot if she missed Howland Island which, as we know, she certainly did. We then have the story concerning her fate which originates from the Gilberts - the captured by the Japanese variation, and the sighting of aircraft wreckage and white fliers by the Gilbert Islanders. Now if those stories are true, especially the latter, then they occurred several years before the PISS occupation of Nikumaroro so it is possible that rumours of that event could have been imported to Nikumaroro with the PISS settlers. Just as Nikumaroro is yet to be confirmed as the landing spot, the Gilbert alternative has yet to be ruled out. Then the skeleton is found and we see Gallagher actively investigating it and openly speculating that it might be Earhart. This despite his attempts at some secrecy may have unwittingly provoked speculation amongst the Nikumaroroans who might just have had a recent memory of similar events and speculation elsewhere - news gets around in island societies. This also could feed into a small group of people's desire to create a stronger relation with the island which is their new home.
So then perhaps we have the Earhart connection in the islander tradition originating elsewhere and becomes a part of the cultural traditions of the new settlers, just like the Ghost Maneaba eventually feeding down to children like Emily to whom the stories told by her elders are part and parcel of her islander cultural education. In such a narrative environment then stray bits of rusty wreckage on the reef could achieve quite high significance. Of course we can't say one way or the other but the intellectual cultural heritage of people, especially when we are using here as testimony, is an inordinately complex study. One need only witness how the story of the male and female skeletons develop when we know that in 1940 there is no mention of them. Also I suspect that the islanders would be closer to the administration than suggested because the administration of the island was by mainly by Gilbertese, after the initial settlement.
In my career I had several experiences of faulty recollection of events in indigenous societies which created unwanted complications in what would otherwise be fairly routine archaeological investigations. Those aside, there is a quite quirky tradition that was recorded in a small aboriginal group in the north of Western Australia concerning Noah's Ark. During WW2 an aircraft had crashed in their tribal country - shortly after the war and after a period of missionary activity this small heap of wreckage was transmogrified into the the resting place of Noah's Ark by some of the converts. And also we have the much more famous cargo cults that sprang up in the islands after WW2
http://en.wikipedia.org/wiki/Cargo_cult . So native memory and traditions are quite often not as clear cut or trustworthy as they can appear.
In the end however it really depends upon what is found on the next trip.
