am I correct in my understanding that Vmcg is predicated on failure of the 'worst' engine?
indeed - worst case situation all round, other than the concession to crosswind. Reference the
current FAR25 requirement. Further "how it's done" details are in
the FTG ... but be prepared for a good read ...
Rumour was that Dai Davis knew all about it but Boeing supressed it as commercially sensitive data
That doesn't make much sense. The effect of bank is across the board and not particular to the 707 or any other bird. Figures of 30-50 kt penalty are not uncommon on larger four motor birds. If one is playing about with Vmca things, then one had best have a modicum of bank on ... worth keeping in mind that, if things start to run awry, increasing bank should/may improve the directional control problems .. at the (probably significant) expense of the desired going up/down numbers .. but, then again, it is all a case of priorities .. and the main priority is to die as late as practicable.