Jingo was my first "favourite" discworld book. I'd already read some when I started Jingo and liked them all very much (except "Equal Rites" - but that might be because I read it in German), but with Jingo I felt there was something special.
It probably was the fact that this book not only was funny, but also was the first I read that went deeper, that was not only funny/ a good read but also reflected on human nature and its nastier sides, in this case xenophobia, racism and jingoism.
Now I haven't read Jingo for some time, but from what is posted here I think I can offer a hypothesis on the Leshp/Leonardo problem.
We (seem to) that Leonardo has seen Leshp several years ago and made sketches. No one else still living seems to have seen Leshp in recent years, else they'd know it'd soon vanish again. Some claim that Leonardo must have made his sketches below the surface of the water (however he achieved that), whereas others say this can't be because he must clearly have been under the island, so it must have been afloat.
Depending on this, some say that the submarine was built by Leonardo before he was imprisoned or that it was built just after Leshp reemerged.
So, my hypothesis:
The submarine had been built by Leonardo before his first trip to the then sunken island Leshp. Somehow he heard the legend, perhaps also heard that Leshp has sunken more than once and that made him curious. Since at the moment Leshp wasn't on the surface, Leonardo would need to invent a device that allowed for submarine research. No problem for a mind like his. He then dived in the approximate area where Leshp was supposed to be and found it submerged. He could make his sketches in the relative dryness of his submarine. As for the the issue how he got under the island if it was submerged: Either it was floating several feet above the ground, which is possible in water if there's enough gas to hold it there, or he found a tunnel that brought him into island where he then could see that there is a huge dome which is now mostly water filled but will fill up with gas sooner or later and float the island.
He did not dismantle his boat then because he clearly states that he dismantles his inventions because Vetinari wants it so; but at this time he wasn't a prisoner. After his imprisonment he couldn't do it anymore and probably had his mind on something completely different anyway.
It is also possible that Leonardo WASN'T below Leshp and only deduced that there must be a cavern that periodically filled with gas and made the island float.
Be that as it may, I agree with those who think that Leonardo has seen the submerged Leshp.