Interesting one Bill, and like every story I reckon there's a grain of truth in it, but no more.
To begin with, Gus rode a "2 1/4hp" (249cc) Levis in the 1920 Junior TT and, having been as high as 5th on lap 4 (of 5), he finished 7th and 2nd 250.
Unlikely, then, that this mighty "off" occurred during the race.
However, on the 3rd day of the practice fortnight (yes, fortnight!), Wednesday June 2nd 1920, "The Motor Cycle" of June 10th recorded that he "took a toss" at the Bungalow, although it was stated that this was "without injury to himself or his machine".
Certainly the Levis, a two-stroke single, had an outside flywheel, but in the light of the above contemporary report it does seem likely that Gus "egged the pudding" a bit to make a good story for the kiddies' magazine.
IF it had happened as described, the hotel to house the flywheel would obviously have been the Bungalow, but I don't believe it did.
In support of this, the contemporary TT copies of "Motor Cycling", all of which I have, make no mention whatever of Gus Kuhn falling off at all that year!
So - a good story, but a story nonetheless :!:
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