"I listened to the Ironhead recording again, it has the standard "Early one morning, all in the month of May" opening, no Hospital is mentioned."

Where did you access the Ironhead recording, Kevin? The version on Youtube definitely lacks the first line and the first couple of syllables of the second line. Does anyone know whether this is just poor Youtube editing, or whether the version on the Lomax album (or the original in the LOC) had the line missing?

I can't find the Lomax transcription of the song, but Doc Watson (who learned it from this source) sang:

Early one morning at the St James Hospital
Early one morning, morning month of May

I agree that it is curious - and very frustrating for us - that what is now regarded as a key line is missing, but to me it would smack of conspiracy theory to suggest that Lomax deliberately interpolated it in order to prove a connection that was only claimed some years later.

And, as Lighter says, we have several versions that did mention the hospital, anyway.