I managed to beat the scenario first time, although grabbing the flag was a near thing. Having previously read the historical account of the incident, I was able to come up with a plan for deploying the guns without being spotted.
The key is to use the 20mm guns on the panzer IIs. Although very weak, the guns can easily hit the KV1 and force it to button up. Shoot and scoot moves can be used to pop in and out of the woodline. If the tanks take turns at firing, the buttoned KV1 will have a hard time spotting the fleeting targets before they disappear.
While this is happening, you can sneak the 88s into position and set them up without being seen. The buttoned KV1 will most likely be hit and knocked out before it spots the guns.