I read this yesterday and when visiting my Grandfather today, he says he does indeed remember riding a figure of eight wooden coaster, inside the pavillion on the Pier.
He visited WSM during summer pretty much every year in the 50's and 60's, and has added weight to this.
I know you've said you've gave up, but I honestly think we can still get some concrete evidence for this.
He remembers riding it 3 years in a row, and remember of it's extortinate cost, and the small 4 seater cars, just like you/other people have mentioned!
He hasn't visited WSM since 1966, but says the ride was definitely gone and replaced with some standard slot machines that year.
His mother and father had photographs, he is positive of it but unfortunately there long gone and he has no clue where they are.
I then showed him all of this thread and after a good of reading this, he agrees with all the contacts you've had about the dates, the car lengths and the fact it did operate to no later than 1968, at the very latest.
He clearly remembers going through old photos with his mother (My Great-grandmother) just before she passed away, and remembers seeing many of him riding the coaster.
Hes got alot of photos in the attic, though he thinks they date to around 1980 and onwards. he reckons older family photos were left in his mothers houses attic, and he never retrieved them.