No such badge was ever made or awarded. The photograph in early editions of Dr Klietmann's seminal reference book is said to show the prototypical pattern produced for OKH approval and Dr Klietmann stated that he had visited the pattern maker who still had the pattern in question after the war.
The badge was approved but not instituted as such and was never awarded. There are no award documents nor soldbuch entries that can be accepted as unquestionable. Having spoken personally with three veterans of Heer balloon units, they made it clear that the lack of badge of their own was a source of resentment and that such a badge would have been as valued as a Parachute Jump Badge.
After all, many balloonists had made parachute descents from balloons and, speaking as someone who has done this myself, it involves even more fear than jumping from an aeroplane! Had anyone been awarded this badge, it would be a matter of record or, at least, would be remembered by members of the small number of units in question, even if it were nothing more than a preliminary document award with a soldbuch entry.
You could also ask about it on GMIC: [url]http.gmic.co.uk[/url]. You have to pay to upload images on the WAF and the site is sponsored by crooked dealers, some of whom have been known to sell fake Army Balloon Observer Badges. The late William C Stump wrote quite a good article about this badge, a version of which is, I think, to be found on the AHF site. However, don't place too much faith in the articles on the AHF website as some of them have proved unreliable in the past, as this link shows: http://www.feldpost.tv/forum/viewtopic.php?p=11318#11318