The question has to be asked of the action of this story, "did it all really happen at all?" After all, in the episode Living In Harmony, the events which took place in the American Wild West, were simulated, or role played, induced with the use of hallucinatory drugs. In Many Happy Returns there is no visible fabrication; the viewer is taken on the voyage and at the end dumped back in the village along with No.6!
It has to be said that the real first act of kindess to the Prisoner, since his abduction to the village, was shown to him by a young gypsy woman. She gave him a cup of tea, or hot broth.
Not only is there a Colonel in Many Happy Returns, but also in The Chimes of Big Ben, Do Not Forsake Me Oh My Darling, and The Girl Who Was Death. Yet there is mention of another Colonel, in Dance of the Dead, when Dutton is on the telephone to No.6, when he refers to "Arthur and the Colonel." So was No.6 previously linked to the military........Certainly British Military Intelligence, who recruited it's men from the military forces.
Be seeing you