I don't have the puzzle or clue, but it seems you're right about the ambiguity.
Eg this link -
http://en.wikipedia.o...bsalom_and_Achitophel
- Chambers Biographical Dictionary agrees, as does Collins, however this (eg) does not -
http://www.deadmetaphor.com/18cblog/?p=68
There are too many references to be listed here & seem to be almost evenly split between 'AbsAlom' & 'AbsOlom'...
I don't suppose the offending letter is checked by another clue?
Sorry if this only increased your uncertainty, but personally, I'd go for 'AbsAlom'...
Good luck, scotman!