I was curious so I googled it, apparently there’s another smaller cave called spy cave, that’s what I was thinking of. The consensus seems to be that it was wartime paranoia coupled with an unsolved Jaffrey murder and people seeing lights on the mountain at night that led to the rumors. While improbable, I do think it would have been possible. On a clear day, I was able to see each individual building in Boston with the naked eye from the summit of Pack. All they would need is a powerful light (I picture the old timey one with shutters for Morse code) and an agreed on time of night