The rumor wasn't specific to Mountain Dew.
The rumor pertained to Yellow #5, the coloring added to Mountain Dew, Mello Yello, etc. I had actually completely forgotten about all that. I never bought into all that, but at that middle school age, boys can be very paranoid about damaging their dinkle.
I remember a similar thing where I knew guys that would never want to ride bikes because they saw something on tv about how it damages the area.