Bill,
I took a brief look into the KGC legend some time ago. As I understood it, the treasure aspect of the story began with the Confederate Treasurey, and what became of it.
"Flight Into Oblivion" tells that story, as it was written by the men who lived it. Here is a short passage from the book:
[The subdued unrest of the morning had completely vanished. Confusion was everywhere as members of Congress, various underofficials, and dignitaries clamored for places on all available trains of the Richmond & Danville Railroad which began leaving the Confederate capital late in the afternoon. About $5OO,000 in double eagle gold pieces, which had been seized in the United States mint in New Orleans in 1861, in copper coins and in silver bricks, gold ingots and nuggets, packed in sacks and boxes—all that remained of the treasure of the Confederacy and the private treasure of the banks of Richmond—had been loaded, during the afternoon, on one train under the supervision of Walter Philbrook, Senior Teller of the Treasury Department, and a group of his assistants. It was guarded by sixty young midshipmen from the Confederate States Naval Academy who were told by their Commandant, Captain William H. Parker, that they had been selected for this dangerous service because they were known to be brave, honest, and discreet young men, and gentlemen. They had been rushed up to Richmond from their school ship, the Patriot Henry, on the James River, and had arrived just in time to prevent what might have developed into a serious pillaging of the treasure by a mob. On another train were Brigadier General Josiah Gorgas, Chief of Ordnance, and a large number of employees from the armory which he had established at Richmond with the machinery captured at Harper's Ferry."
The rest of the book details what became of the that loot...... and the men who were fleeing the Government, a bite at a time. I have a nice first edition, signed by Hanna. It's an interesting piece of history and I have read it a couple of times.
I am no expert, or even a fan, of the KGC so my conclusions as to how they got their start could very well be all wrong.
Take care,
Joe
It would not give me an option to send to a file folder on my computer and had a heck of a time trying to find out just where it went. By sending it to myself in email I can now forward it (them) to you. (so I have another copy for later
) If I had your email address I could have sent it directly. 
