This sort of thing has happened before, but in an even more embarassing (for the media) way. In 1994 we had the Jammal Ark Hoax.
These stories and others, combined with the way my bunch writes and uses press releases, has revealed to me the vast majority of "objective journalists" don't do much more than sit beside fax machines and regurgitate things that advocacy organization, people with axes to grind, write for them.
And we're not just talking about the Dumas Clarion or the Fayetteville Observer. Places like the Washington Post, New York Times, all the major TV news networks (the morning programs especially), and even most radio outlets have fallen victim to these things many, many times.