LOS Question from Hill

[cjsiam]

I contend that in the attached image the hiding mortar (in 0912) can SEE--has an unblocked LOS-- the stack of
russian mortars in 0208.

The LOS is not blocked---the Yellow arrow is the hill line 1 hex from the firing unit....
A unit in the red arrow hex would be out of LOS
Units in any of the other hexes are ># of hexes from slope hex then observing unit, thus they are visible....

I think that is how the rule reads.....
#1) Am I correct according to RAW

#2) I have heard/seen another "method" (Peter?) using slope before and behind the observing unit--where is that written?
  and how do we establish which we use--what do we call that rule?  (is there a PG-HQ Optional Rules page?)

thanks!