Having flown the south and central Pacific regions in 737's in the period 1976 to 1990 I always marvelled at the sight of thousands of low altitude tiny cumulus clouds that invariably cast their shadow on the ocean below. You would swear there were atolls under each cloud because from 35,000 ft the cloud shadows could easily be mistaken for an atoll. Thousands of atolls in fact. It was by observing those cloud shadows I could understand how easy it would be for a desperately tired crew flying at 2-5000 feet to miss seeing one vital atoll.
My guess is the aircraft was forced to ditch as it ran out of fuel probably in an area of 50-80 miles surrounding its planned destination.
A similar thing happened in 1954 when an RAF Canberra bomber departed Momote airfield on Manus island north of New Guinea for the US base at Kwajalein in the Marshall Islands. Distance 1400 miles which would be around 3.5 hours in a Canberra. See the story in another Pprune forum.
In that incident the Canberra was in thick high level cloud and its radio compass failed. The crew were forced to descend earlier than planned in order to obtain a pin-point. They broke clear of low cloud at 1000 feet and were unable to find any trace of an island immediately. They were faced with ditching when an atoll was seen and short of fuel they successfully landed wheels down in the shallow water of a lagoon. It turned out they were off course and 90 miles short of Kwajalein. That was after four hours airborne whereas the Lockheed Electra would have been airborne closer to ten hours when fuel was exhausted.