Hi Auggie, This photo made me ??? too when I first saw it. lol... But after a little info-scrounge I came to the conclusion that the 'object' was more than likely a picture taken from the USS Trepang of a 'target balloon'.
... It was from a series of pictures that made a bit of a sensation in France when it hit the 'Top Secret Magazine' and soon featured as a John Greenwald 'Black Vault Article' and then re-presented by all and sundry ....
new illuminati: Amazing UFO Photographs taken from a US Navy Submarine
Which is well presented and really tantalises a bit... And then .. I can't remember who exactly?, but someone on another site mentioned something about 'naval target balloons', i'd never heard of such things but was intrigued by that possibility ...and so with a bit of searching I realised that yes there were such things from way back in the 1940s up until at least the 80s. .... And then I came across the clincher [for me at least] , it was an article from top French investigator Gilles Fernandez in which he exposed the pictures as being a mixture of naval exercise featuring target-balloons, and some of [that old favourite of the genre] photoshop! ... And the photoshop part of his assertion was later backed up by Belgian photo-expert investigator Wim Van Utrecht. ... here's a good summary of the case ...
Sceptiques vs. les Soucoupes Volantes: Les Photographies de l'USS "Trepang" : La Preuve d'un Montage "PhotoShop"...
Cheers Auggie.