Solving the puzzle as written:
Start from the bottom.
x = number of people per gang (positive integer)
4x = number of people who arrived in camp
(4x + 1) * 8/7 = number of people at start of day 2
(4x + 1) * 8/7 * 6/5 = number of people at start of day 1 (less than 1000)
4x + 1 is a multiple of 35
Inspection of small multiples gives x = 26 + 35y for some non-negative integer y
Thus, (4x + 1) * 8/7 * 6/5 = 144 + 192y
y is at most 4, so number of people at start of day 1 is 144, 336, 528, 720, or 912
Now if Jaap's piece is added:
z = number of people per gang (positive integer)
4z = number of people who arrived in camp
4z * 4/3 = number of people at start of day 3
(16z/3 + 1) * 8/7 = number of people at start of day 2
(16z/3 + 1) * 8/7 * 6/5 = number of people at start of day 1 (less than 1000)
Let 4x = 16z/3, i.e. x = 4z/3, so the solutions are a subset of the above
x (previously 26, 61, 96, 131, or 166) is a multiple of 3, so it must be 96, and the number of people at start of day 1 is 528