“I think that over time memories can become distorted (either intentionally or not).”
An unwarranted assumption. The facts are gleaned from contemporary accounts, not musty old memories.
Watch “Fatima” http://www.amazon.com/FATIMA-Ricardo-Montalban-Award-Winning/dp/B0010VJK22 if you dare, then look at those contemporary accounts yourself.
“Never let the truth get in the way of a good story.”
What we have here is prejudice getting in the way of truth.
Talk about a good story. The event is recorded in O Seculo, an anti-Catholic paper.