I would rather believe someone from Elvis' musical entourage than a MM member. Although some of them, like Jerry Shilling for instance, were very loyal to Elvis during his life time, most of them turned very commercial after 1977.
Another point is that Elvis did not discuss every detail with his inner circle especially when it had something to do with his relationship with the Colonel. He could never be sure who would go around behind his back.
However with his fellow musicians like the Imperials or the Stamps he could talk easily about his frustrations especially if it would concern Gospel music.
And don't forget the Colonel did try to prevent him several times recording specific songs. Remember the arguing about Suspicious Minds?? If Tom Diskin was't there on the spot we might never heard of the song. And that's just an argument that leaked out. I'm pretty sure there are more stories in the same line.
When my friend approached the Imperials it was because he wanted them to autograph his picture. Because they are very friendly and interested in their fans and Elvis' fans my friend was able to start a conversation and just out of curisosity and being an admirer of Elvis Gospel music he asked about it. He could never imagine he would get this kind of answer from Terry Blackwood.
I can imagine easily that the members of the Imperials, who worked on both Elvis? awarded Gospel albums might have asked Elvis the same question.