I know I said that I was going to give you the Allied reaction, but I found inspiration for this particular piece.
It was a perfectly splendid day on the German Baltic Coast as the convoy of military vehicles made it's way towards the Waffenprüfanstalt Peenemünde which, under the auspices of the War Ministry, was developing rocket technology for Germany. It was a prestige project so quite obviously the other services had made a grab. The Navy was out of the race now, considering that Hitler had ordered the remaining surface ships to be laid up until he decided what to do with them, but Reichsführer SS Heinrich Himmler and the OKW had been fighting the Turf War to end all Turf Wars over the programme, but in the end the OKW had prevailed by pointing pointing out that since the rockets were to be ground launched, they belonged to the Artillery Branch of the Heer. (At the time the Waffen-SS had been but a single Division's worth of men.)
So the Scientist in charge held a Colonel's commission with the Heer, even though Wernher von Braun was a-political and mostly interested in making bigger and better rockets. He didn't care one bit just who was paying the bills.
It was, to be perfectly honest, far from the first test firing of the newest rocket to come out of the design offices, but it was now that it would be officially revealed to the OKW and the Führer. Von Braun had made sure that everything worked, one did not want a repeat of the abysmal failure when General Dornberger had almost been fried alive when another rocket had nearly fallen onto the re-viewing stand instead of going towards the coast as intended.
Only the fourth launch had been a total success, and this here was the fifth. Von Braun had spoken against this particular test being conducted today, but the weather was fine and Dornberger had insisted that Hitler be shown a launch when he visited the facility.
For the first time in almost two years he was wearing the full dress uniform, as greeting the Führer in anything less wouldn't do, but now that he was in the launch bunker he had taken off most of it again.
“Final checks complete, Doctor.”
Von Braun nodded and said:
“Prepare for launch.”
For the next six minutes the countdown and last second preparations continued.
The engine engaged and in an massive cloud of smoke the A-4 rocket rose from the pad and flew into nothingness.
“Doctor, we have a problem. It's diverting from the projected course.” said the men at the apparatus that allowed the scientists to track the rocket farther than with the naked eye. “It's going eastwards instead, Doctor.”
In fact the rocket was going to crash somewhere in central Poland. However von Braun hoped that something was salvageable from this disaster. Hitler didn't need to know just yet that the rocket had failed to go anywhere near the target until it was decided how one would need to spin things.
Two hours and an extensive tour of the facilities later von Braun, Hitler, General der Artillerie Kachelmann (Chief of the Heer Artillery Branch and thus the 'owner' of the programme) were watching what later generations would call a sales pitch.
“Frankly, Aggregat 4 is merely the tip of an iceberg so to speak.” von Braun said. “As you know mein Führer we have looked at the concept of Artillery rockets before and the Red Army is using the Katyusha to great effect. As you know the A-4 is a long-range weapon we mean to use to attack England around their Air Defences, but we can use smaller versions that fly not as far and not as fast and aren't as big in a battlefield role.”
“What good would that do? These rockets of yours are still very inaccurate, Doctor.” Hitler said.
“Well, we would mostly use them against heavily defended strategic rather than tactical targets, bridges, ammunition depots, rail junctions and...of course other things.”
“How many would you need to destroy, say, the bridges across the Oder?”
“That depends. We would go for saturation, so at least twenty to thirty, mein Führer.”
That was more than any of the men in the room had expected. But von Braun was determined to get funds for his programme, and if that meant building weapons now and space rockets later then so be it.
“I must say though that these rockets would be cheap, both in materials and production and have only the most minimal guidance, just enough to let them find the target area and hit within a radius of, oh, a mile.” Before anyone could say anything the Rocket Scientist continued to talk. “However, that is merely one application of rocket technology to the war effort, Gentlemen.”
“The project...” Hitler began and trailed off.
“Yes, the project you directed us to begin when you were here, but I believe General Dornberger, since this was under his direct supervision.”
Von Braun was well aware that he was the public face of the project, and that the things with the most and most immediate military applications were generally run by Dornberger, but both men had a truce with each other. As long as von Braun made sure that funding flowed, Dornberger did not interfere too much in von Braun's fancy ballistic rockets. That the A-4 had become one of Hitler's pet projects certainly helped, since no one at the OKW was comfortable with questioning the budget when Hitler always pre-approved it for the next half year. With that he vacated the stage.
Peenemünde was the biggest rocket facility in the world at this time. The Soviets were known to have a similar installation somewhere in Central Asia, but it was nowhere near the site, and the three men in charge there were as much at odds with each other as the British Empire and the Axis powers, and the utter failure of German Intelligence to even plant the most rudimentary of networks outside the major British cities had made sure that the British Aeronautical Research Centre was missed completely.
Both sides were very, very busy with furthering one's own rocket Technology, and Peenemünde was well known to the British, but Bomber Command, tied up with supporting the front and trying to take the war to the Japanese (most importantly bombing the roads that led south to the Singapore Siege line) and so the facility was on the target list but not bombed.
The A-4 that had been tested earlier in the day had not hit the ocean as predicted. Instead when contact had been lost it had continued to veer off course and made a wide curve into occupied Poland where some of the parts were about to fall into the hands of the Polish resistance. The SOE was heavily involved in Poland, supplied from Sweden where the authorities were conveniently looking the other way when now and then what seemed to be civilian Dakotas registered to a company called 'Universal Exports' occasionally flew out over the Baltic Sea and returned some time later.
On this route the British were made aware that the Germans were testing some sort of weapon and the parts were very, very carefully prepared for transport. The British Scientists eagerly awaited the pieces.
Comments, questions, rotten tomatoes?
And yes, the Polish Home Army really captured parts of a crashed V-2 and handed it to the Brits.
 Of course von Braun is bullshitting massively, because they have nothing nowhere near that accurate. What von Braun is trying to sell here is more a proto-Scud than a V-1, even though the F-103 (V-1) will see at least some production.
 Neither Denmark nor Norway are so far occupied. As a result the Swedes are far more Allied-leaning, as is Norway, mainly in the way that Swedish Iron ore is carried out through Narvik and feeds UK factories. The Germans don't use Swedish Iron ore as a result and are somewhat dependant on the Soviets. Hitler has of course plans to swallow the Scandinavian countries that are to be carried out 'as soon as the Allied Invasion is defeated.'
 Which of course a certain Naval officer of our mutual acquaintance will use as a nod to the brave men on those flights. When I googled the name for amusement, I that there seem to be at least two genuine companies called that, one in India, the other in the UK.