Not long before the report Sandra linked us to, there was a report of the action, as remembered by a Kormoran survivor, published in the Sydney Morning Herald; I've been recovering from an encounter with a surgeon so I have no specific details of sources.

According to another report I saw (also in the SMH and around the same time as Sandra's), the initial salvos from the Kormoran were extremely accurate; only four (of 71?) projectiles missing the Sydney, which was only 2000 metres from the Kormoran at the time. These numbers are from the article as reported and are the result of deliberations of the archaeology, records from Kormoran survivors and calculations by naval architects.

So it was no wonder that almost all control/coordination communications within the ship were put out of action almost immediately, along with several turrets and various davits. There was also, in the article, an allegation that design flaws in the Sydney contributed to its almost immediate incapacitation; all the lifeboats were said to be clustered together adjacent to the Walrus' fuel stores, which were highly flammable, and the bulkheads/doors separating compartments were thin steel or plywood incapable of preventing smoke-logging.

Even so, maintaining a distance out of range of the Kormoran and launching the Walrus for an aerial inspection would seem to have been a prudent alternative course of action and I suspect we'll never find out the exact reason(s) why it wasn't followed.

Cheers, Rowan