We had some fantastic contenders in the contest, but in the end, one in particular stood out for its exemplary combination of absurdity and near plausibility. Its straight-faced reporting put it over the top.
The Mormon Mafia myth is a great one. Thanks again to the original questioner for the terrific start to our contest, and for all those who helped to bolster that particular myth in the comments. I see a bright (or should I say murky?) future for this urban legend. In fact, the number of Mormons who found their way here to comment could be taken as further proof that Mormons are overrunning children's publishing. But shh. That's a myth.
Winner for best myth:
Many people don't realize that, after the publication of the 1986 Meese Report on pornography, and following its recommendations, the U.S. Court of Appeals, Fifth Circuit, ruled that it was illegal to publish photographs of minors on the covers of books. It was a side ruling of a challenge brought against Sarah, Plain and Tall. Though the initial suit failed to bar the book from Louisiana public schools on account of its allegedly promoting white slavery and mail order brides, the wide-ranging discussion among the justices did lead to a determination that photographs of actual children on the covers of books that deal with mature subject matter could constitute a form of obscenity, under a strict construction of the statutes. This is why, to this day, almost no YA or MG novels include full-face photographs of minors. The back-of-the-head or from-the-eyes-up photos common on today's novels reflect a careful compromise by art directors to avoid any potential legal challenges.
You need to use a "magic word" in your cover letter or your manuscript will NOT get read. It's OK to work it into the text or just add it at the bottom like a salutation, but it had BETTER be there.
Why? Because editors (and increasingly, agents) scan the cover letters using computer software to help filter out the amateurish stuff. They know anyone who's put a serious effort into attaining a level of professionalism and deserve a serious read will have learned the "magic word" (which is really a three-word phrase) at a conference or a workshop or by corresponding with published authors.
Using the phrase doesn't guarantee publication or representation, but in most cases with publishers and maybe fifty percent of agents, especially the bigger agencies, without it, your manuscript won't even get read. You'll just get that form rejection, if you even get that. If you do use the word you'll always get a personal letter, even if it's a rejection.
I myself used it by dumb luck in my plot synopsis, before I even knew about it. By the time my agent found out, it was too late--papers were already signed.
It's not really that secret any more -- just google "editors shibbolleth" and it'll come up on some blogs, although it tends to get disappeared as quickly as it appears, whenever I do a search I see the right answer somewhere on the first page. I would just tell you what it is, but I'm sure EdAnon as an editor would not appreciate it. However I've noticed she often includes parts of the phrase in the "Captcha" word verification for leaving comments, which always makes me smile.
Thanks to Matt and Kurtis, and to everyone for playing!