Whoops!
The times do rather change, don't they... the choice is basically for me to change it to "died of wounds some time later", make the action non-fatal or to make the medal "honorary" in having it noted in Gazette.
Another solution may be to have it be one of the batch of posthumous awards made in 1907 for such notes, with a change to the initial wording to "[name, unit] would have been recommended to Her Majesty for the decoration of the Victoria Cross had he survived", and maybe an "historian's comment" that the award didn't actually come for almost fifty years.