Thank you everyone...I have a more solid grasp on it now.

Hi Niko, I Agree with Jim. "No part of a person’s body is a ‘device’. It is therefore permissible for a competitor to hold a sheet outboard".
In fact, the index to the Case Book links Case 4 to both Rule 49 and Rule 55.3 and separately lists Case 97 as addressing another permitted device (a jockey pole attached to a spinnaker guy). This reinforces the jurisprudence's distinction between human action and mechanical devices. 

Nice work on the AI summary ;-)

"1. if the other boat is beyond hailing distance, the protesting boat need not hail but she shall inform the other boat at the first reasonable opportunity;"

What does at the first reasonable opportunity mean? If not defined in the SIs, what is the default? Who decides it - the protest commitee?

G is plodding along downwind, trailing, setting up for a routine port tack rounding.  She should be set up for a windward drop, maybe with the pole off, in which case she will have no problem gybing back after luffing to keep clear of Y, or maybe she will still have the pole up: if she leaves the pole up too long after the drop, she'll be in trouble.  Dropping the pole quickly and tacking the headsail over the pole requires people to know what and how to do it.  I think that is right on the cusp of 'competent but not expert', but maybe it's a little on the 'very competent' side.

I know this isn't relevant to the question, but I agree with this analysis but take it one step further.  If it was a dipole boat, Blue's pole would be in the process of coming off at position 2.  When Yellow starts the tack, Blue jibes onto starboard and starts dousing the spinnaker on the port side, crosses in front of Yellow, then jibes back.  This sets up a faster rounding (wide to tight) for Blue. I also agree this would need a 'very competent' crew.