The one that diverted was in the same season (ie, Oct / Nov 1979). I don't think any flight that got to Mac Station had CAVOK, but stand to be corrected.
There wasn't any "switch" to INS, because all the flights were on DC10s, where INS was standard. The waypoint for the initial flights was one of nav aids at Mac Station, deliberately selected for that reason. This didn't mean, obviously, that the flights were "programmed to fly over an active volcanoe", because a human being decided where the aircraft went, not a computer. The only reason for staying on the nav track all the way to Mac Station was if it was covered in cloud. In that situation, the idea was to stay on the track until past the summit and then do an out-and-back cloud-break using the NDB. The pilots at the briefing actually practised this manouvre in the simulator later in the day, even though the NDB wasn't working. The exercise began with the simulator positioned overhead Mac Station - not 20nm to west. Given that, I can't see how any of them could have thought that the waypoint was anywhere other than Mac Station.