I had noticed that circle also, but the size of it makes no sense for calculations at 11º
unless it's the maximum lead angle for japanese torpedoes, a rough indicator of the proximity of very close targets, or something similar.
It could very well be a image distortion due to a worn out layer in the external lense on a unprotected part of it or similar.
In this thread here:
http://www.subsim.com/radioroom/showthread.php?t=148975 I uploaded for Vanjast the reticles I did for the german periscopes in SH4. The one in the observation scope has already the divisions you need, calculated for the game when using an aperture angle of 47 in cameras.dat IIRC. That will put the german reticle out of the scope view, and also give you exact readings from the reticle, at the cost of losing 5º FOV at each side (Unfortunately no alternative is possible since the reticle is hardcoded).
Hope that works for you
