John Hopkins (that's John Hopkins the American writer and friend to the Beats, not to be confused with John Hopkins the British counter-cultural figure and friend to the etc.), who attended the end of year party at the Palace in '67, described it thusly in his Tangier Diaries: "Last night Paul and Talitha Getty threw a New Year's Eve party at their palace in the Medina. Paul McCartney and John Lennon were there, flat on their backs. They couldn't get off the floor let alone talk. I've never seen so many people out of control."
Now, Macca certainly wasn't there; he was flat on his back in another location. But to someone who wasn't really paying attention (fill in your own reasons), I suppose from a distance Victor Spinetti might have been mistaken for Paul (and indeed, in this instance, probably was). If you examine the picture above, that's almost certainly Victor to Cynthia's right.
Incidentally, a quick search on-line reveals a few interior images taken in le Palais, which is full of similar alcoves:
Thanks to Lizzie Bravo for forwarding the pic.
Also, further apologies for the lack of activity round these parts. Can't be helped at the moment, but there will be occasional posts as and when...