I think that in order to calculate your latitude and longitude position using what amount to high-tech sextant readings you have to know your local down vector to a high degree of accuracy. That is, the system judges the position of the Blackbird by comparing its local down vector with the angles to the star sightings. If the down vector measurement is off by an arcsecond, the measured latitude and longitude position on the earth will also be off by an arcsecond (at sea level, about 600 feet).
It seems to me that there's an interesting problem that the Blackbird goes so fast that its down vector changes dramatically over the course of a typical flight, so I'm wondering how it accurately updates its down vector reference. Jets can go through arbitrary and wobbly 3-d trajectories, accelerating in any direction, so it can't be a simple measurement of gravity. It would have to be a accelerometer combined with inertial and gyro and elevation readings all summed up.
If you can measure the front and back horizon accurately you can measure the left and right horizons too, and that will give you an accurate down vector.
But I don't think it's possible to measure a horizon that accurately. There are temperature and pressure dependent atmospheric effects at low angles that effect how light refracts and curves through the atmosphere, and these effects will have to be compensated for to measure the angle accurately. Additionally, there are mountains and valleys to compensate for.
A very precise estimation of which direction gravity is pulling down towards. Which is almost, but not exactly, the vector towards the center of the earth. And it also needs to be disentangled from the suborbital centrifugal/centripetal forces experienced by the movement of the Blackbird.
