I know that many (all?) of the onlookers were awe-struck by what happened, but I don't know whether they had formulated any expectations of what the explosion was going to look like beforehand, and how correct these expectations were (if indeed they had any expectations at all).

From this article:

“The whole country was lighted by a searing light with the intensity many times that of the midday sun,” [General Thomas Farrell] wrote immediately afterward. “It was golden, purple, violet, gray, and blue. It lighted every peak, crevasse, and ridge of the nearby mountain range with a clarity and beauty that cannot be described but must be seen to be imagined. It was that beauty the great poets dream about but describe most poorly and inadequately.”

“Just as I put my foot on the ground I was enveloped with a warm brilliant yellow white light—from darkness to brilliant sunshine in an instant,” [Ernest O. Lawrence] wrote.

“The enormity of the light and its length quite stunned me,” [James Conant] wrote. “The whole sky suddenly full of white light like the end of the world.”

[Luis Alvarez] likened the debris cloud, which rose to a height of some thirty thousand feet in ten minutes, to “a parachute which was being blown up by a large electric fan,” noting that it “had very much the appearance of a large mushroom.”

“It looked like a giant mushroom; the stalk was the thousands of tons of sand being sucked up by the explosion; the top of the mushroom was a flowering ball of fire,” [Charles Thomas] wrote. “It resembled a giant brain the convolutions of which were constantly changing.”

Thomas: “It is safe to say that nothing as terrible has been made by man before.” Lawrence: “There was restrained applause, but more a hushed murmuring bordering on reverence.” Farrell: “The strong, sustained, awesome roar…warned of doomsday and made us feel that we puny things were blasphemous.”