Brian,
that's a very good point, and one that I was going to use to illustrate my own.
Then, when I delved a little deeper, I found that cloud is defined as the product of the cooling of air specifically due to some sort of lifting mechanism. (I didn't differentiate between this subtle difference between fog which forms because of some other cooling method such as radiation, conduction or advection).
So in your scenario, I would suggest that orographic lifting was the most likely cause of your 'fog/cloud'.
That being the case, the mountain is in cloud... and, as you so rightly pointed out, cumulus granitus if you don't maintain your LSALT.
Anyway, I had to eat crow from my previous posts. The BOM website has a glossary of meteorological terms where I discovered I was wrong in my definition of fog as being cloud that touches the ground. But now we could be accused of getting into semantics.
Say g'day to Pete T for me. He used to monster me on my check rides and would ask me questions like these on my instrument rating tests. (How's his golf swing, these days?)
Happy flying.
Conway