Well, the blanker would cost you about 1/5th along the time axis (see
screenshot below). During the remaining 4/5th the receiver may run at
maximum sensitivity - which would theoretically cost you about 2dB. This
screenshot was made from Jim's recording (without the noiseblanker of
course). Imagine you wiped out the pulse trains, and filled the "gaps"
by using a receiver with a bandwidth of less than 1/GRI. Here: 1/63
milliseconds, which means RX bandwidth of less than ~ 15 Hz, which still
suitable for moderate "normal" CW speeds. Of course, this principle only
works as long as Rugby doesn't start dual-rated transmission (like some
other Loran sites) - this would make things much more complicated.
The blanker idea may work but when there is such a large proportion of
noise, if you manage to cut it all out there isn't much signal left