Found it! I pointed out in my previous invisibility post that R.W. Wood attributes an early discussion of invisibility to Lord Rayleigh in his Encyclopædia Britannica article on optics; however, I couldn’t find the quote after browsing Rayleigh’s articles and wondered if Wood had miscited Rayleigh’s work.
A bit of closer inspection, however, shows that I overlooked Rayleigh’s comment, which was buried in a footnote in his article on geometrical optics (Encyclopædia Britannica, vol. 17 (1884, 9th ed.), 798-807), in what I would have considered an unlikely place, namely his discussion of achromatic object-glasses (p. 805). The footnote is as follows:
Even when the optical differences are not small it is well to remember that transparent bodies are only visible in virtue of a variable illumination. If the light falls equally in all directions, as it might approximately do for an observer on a high monument during a thick fog, the edge of (for example) a perfectly transparent prism would be absolutely invisible. If a spherical cloud, composed of absolutely transparent material, surround symmetrically a source of light, the illumination at a distance would not be diminished by its presence.
Skulls in the Stars 