It looks like they discuss the ad in Bob Bly's 1997 "The Elements of Copywriting." You might call the library to find out if they have the book, and see if the ad or ad copy is reproduced. The local library might not have it, but you can call the New York Public Library and tell them you live in Queens.

Same with the 1978, Vol 41 edition of Direct Marketing magazine. Good luck finding that one!

The following page appears to have an article as discussed in Bob Bly's newsletter in 2010. Look for the story titled "From negative to positive - it only takes a story" on:

Brand Story » Story Telling

However, this was an article for an apple grower and legendary ad man named James Webb Young who "started selling fruit by mail around the same time that Harry & David did" but it does involve marketing hailstorm-damaged fruit. Perhaps it is what you are looking for?

Wow, here's James Webb Young doing his famous impression of Mitch McConnell:

Google Image Result for http://www.hardtofindseminars.com/images/James_Web_Young.jpg

https://en.wikipedia.org/wiki/Mitch_McConnell