Final answer:
In the story, the kids think that the dead body approaching the shore is a whale.
Step-by-step explanation:
In the story The Handsomest Drowned Man in the World, when the dead body first approaches the shore, the kids playing mistakenly think that it is a whale. The text mentions that the kids first see the body and mistake it for a boat, then they notice that it is on wheels and assume that it must be a life-boat being dragged along the shore on a wagon. So while they initially think it is a boat, they later determine it is a whale.