Police believe the medal, estimated to be worth at least $50,000, was stolen and returned when the heat went on.
"Last seen in a cupboard in the museum office", several searches over 18 months failed to locate it, Port Chalmers police officer Senior Constable Phil Beckwith said on Friday.
It mysteriously reappeared in an obvious place in the museum office in January.
"We think someone took it for themselves, then panicked and returned it."
The medal was presented to Mrs Dickson for her actions during the 1990 Aramoana tragedy when gunman David Gray fatally shot 13 people.
When Gray was still armed and on the loose, she left her house, helped her wounded neighbour Chris Cole, who later died from his injuries, rang emergency services and kept in touch with police throughout the night.
Mrs Dickson died in 2007 and her family gave the medal to the museum on long-term loan four months later.
Family spokeswoman Kris Smith, a Port Chalmers resident and Dickson family friend, said on Friday it was only by chance it was determined the medal was missing.
When family members went to see it in May 2008, it was not on display and the staff member on duty could not find it in storage.
But after several thorough searches, including one led by former police officer and Dickson family friend Bill O'Brien, it became clear the medal had gone, she said.
Its recovery was "good news", but the family had approached the Otago Daily Times because the incident raised questions about the systems of the Port Chalmers Historical Society which administers the museum.
Ms Smith said there was no record of the medal having been received, though the family had a copy of the loan agreement.
The museum's acquisitions register had not been filled in, the medal had not been catalogued, and there was no record of where it was stored.
The acquisition was not recorded in the society's minutes and members of the executive did not know it had been lent to the museum until she told them.
Museum security was also lax, Ms Smith suggested.
"Anyone could walk in there and walk out with anything."
People needed to "think carefully" about donating items to small museums, she said.
"People think their family heirlooms will be safe and they are not."
Port Chalmers Historical Society president John Neilson said he was "as disappointed as anyone" about what had happened.
"I understand why [the family] is annoyed, I'm bloody well annoyed too."
However, he said he believed the medal was stolen and returned and there was little which could have been done to stop that.
"We're not the first museum this has happened to."
Security had been increased "300%" in the past couple of months, he said.
Mr Neilson said although the historical society administered the museum, it was largely run by a group of volunteers.
He accepted the society executive did not know the medal had been lent to the museum and said steps had been taken to improve communication.
It was true the medal had not been listed in the museum's main acquisitions register, he said.
"The paperwork had been done but the information was not transferred over to the register. That was human error."
Comments
I think the "$50,000" guess is very wrong and a number pulled from thin air. According to the 2017 Spink Medal Guide (in Pound stirling) Elizabeth II 1st and 2nd type are both listed at 3500-4000 for civilians and for military personel 4000-5500.