Hi Tim. That 1855 description of the Telegraph Station from the "Annals of SF" has caused lots of confusion over the years.
First, Point Lobos is actually the geographic point of land just north of the Sutro Baths ruins, where the Sky Tram once terminated, but in the 19th century the name was loosely applied to everything in the vicinity of the Cliff House, what we would now refer to as Lands End. Saying the station was "at Point Lobos, overlooking the ocean" places it in a very broad area.
Second, no part of the terrain around Point Lobos "is in full view of that [station] on Telegraph Hill.' The high ridge of the Presidio blocks line-of-site between the two stations. For a practical illustration, check out the OpenSFHistory photo "View West from Coit Tower Mar 1958" at http://opensfhistory.org/Display/wnp25.0942.jpg
In the earliest days of the Gold Rush, when the telegraph system was comprised of manually-set semaphore signals, there was a relay station atop today's Robb Hill in the Presidio. When the lookout at Point Lobos saw an incoming ship he set the semaphore arms atop his tiny station. An observer at the relay station in the Presidio watched the Point Lobos station through a telescope, and set his semaphore to match the outer station signal settings. From there, the Telegraph Hill station could see the semaphore settings and set the arms accordingly for the folks below to see.
This contraption of signal arms only last a few years until it was replaced by a newfangled electrical telegraph system in 1853, at which time the Presidio relay station was presumably abandoned, although old maps of the Presidio for years afterwards showed a knoll labeled "Telegraph HIll" at the highest point of today's Fort Scott at Robb Hill.
So, where was the original Gold Rush semaphore station? There aren't any accurate pre-1853 maps of the Point Lobos area, but using logic, it was probably on a high hilltop near Point Lobos that provided both a clear view to the west of approaching ships as well as to the east and the Presidio relay station.
My guess? Somewhere near the gun batteries at today's West Fort Miley.
At some point, the original tiny semaphore station at Point Lobos was abandoned and a larger Marine Exchange Lookout constructed on the exact site of today's USS San Francisco Memorial on El Camino Del Mar. It stood until 1927 when it was replaced by the still-standing Octagon House station slightly higher on the hill.