At http://lyricstranslate.com/en/daleko-mi-je-biser-jadrana-its-far-away-pearl-adriatic.html I found what I think must be the original that Grace Williams collected. Here's the translation:

it's far away the pearl of adriatic

it's far away the pearl of adriatic
it's so far my home town
and it's more far my darling,
who i faithfully love

i sail the see,i count the stars
i think about home all the time
i live in hope,i'm full of joy
to see you again

sail,sail a little boat
let a silver wave carries you
i'm crying ,i can't stop
and i think about home all the time

"Pearl OF the Adriatic" makes more sense, as that's Dubrovnik. Williams maybe changed it because Dubrovnik isn't on an island.

Still hunting for a recording of either version.