You’re right, Blegen’s find at Pylos — literally on the first day of his dig there — meant there was a large body of published (undeciphered) Linear B texts for the first time, and that is what Ventris used. By the time he had his breakthrough, Evans had been dead for years, so he never had to eat crow about it. And thanks for the etymology!
Thalassa is one of many words with -ss- or -s- (including common nouns like glossa and nesos and proper nouns like Knossos, Tylissos, Parnassos, etc.--in Attica they tend to be -tt- as in Hymettos, Lycabettos) that are all thought to come from the pre-Greek population. The placenames are on the mainland, on Crete, and on other islands. Also words in -nth- are thought to come from the same previous language (Corinth, plinth, etc.).
For place names to be taken over from earlier inhabitants is common--many examples in the US of Indian, Spanish, or French place names.