NJ, I notice from IMDB.com that Hawtrey was said to have quit after "a dispute over billing". I imagine your version is correct.
The same site also says this:
There were problems with the exploding cake scene, which caused several re-takes to be done. Actor Lance Percival, who portrayed the ship's cook Wilfred Haines, once said of this: "They were trying to get the cake to blow up in my face. It was done with a pressure pump underneath with the cake mixture sitting on top of an air pipe. When they pressed a button the mixture was to shoot all over my face. However, every time I leaned over to 'smell the aroma' just before it exploded, I blinked as it actually shot up i.e. I knew it was coming! Therefore it took nine takes to get a scene that lasts ten seconds - unheard of in a Carry On".