Harmless stories retold in school only need about two periods to change into nasty perverted rumours that win the hapless victim a year's worth of beatings. Let's study the following case;
Gareth and Joe walked to school together everyday. One day, Gareth told Joe that he felt sick because he had to share bath water with his brother. He had waited for his brother to get out, then got in himself and washed his face with the water, but his brother then told him he had done a piss in the bath.
Became;
Gareth's brother pissed into the water in front of Gareth and then Gareth drank the water. Once.
Became;
Gaz lets his brother piss into his mouth. REGULARLY.
Became;
Gareth ALWAYS begs his brother to piss into his mouth, because he loves pissdrinking SO DAMN MUCH.
Became;
Gareth CONSTANTLY sucks his brother off in the bath. So much so, it's amazing he has time to come to school.
Became;
Joe having to go into hiding for the rest of that week, as Gareth tried to track him down to kick his teeth in.

The rumour mill worked overtime for this one:

Rufus once bit his lip in front of the school vicar.
And thus:
Rufus said 'fuck' in front of the vicar
Begat...
Rufus told the vicar to fuck off.
Begat...
Rufus pushed the vicar and told him to fuck off.
Begat...
Rufus twatted the actual Pope.

This seems as good a forum as any to state; David Craig, once and for all, I don't care what your mum says my mum said in 1982, I did NOT have stitches on my cock when I was cicumcised.

Matty Johnson was visiting his equally vaucous and football-obsessed would-be criminal friend David Warburton one night at his home. Warby, keen to impress his friend, set about beating up his younger brother at various points during the evening.
At one point, Warby went off on his own to continue the job and had been gone some time. But when Matty went to investigate, what he actually heard was Warby's brother, ever so faintly saying, "stop it, David. It hurts", behind their closed bedroom door.
Naturally, it was assumed that Warby fucked his brother regularly and to commemorate this discovery, Billy Brown brought in a tape of that song that goes "he's my brother" and played it in the form room.

1991, and Matty was staying over at Taylor's house. Taylor's mum and dad had gone out and when they returned, Taylor's parents sent the two fourteen year olds off to bed in a perfectly normal fashion. The following day, when viewed through the inexplicable filter of rumour madness, this gradually:

Became: Taylor's mum and dad came back pissed up and sent the lads packing.
Became: Taylor's dad was drunkenly groping Taylor's mum whilst slurring 'It's OK, love, the lads are going upstairs now'.
Became: Taylor's mum and dad went into the kitchen to have it off, regardless of who was where in the house.
Became: They were so pissed up and randy, they had sex IN THE OVEN while Taylor cried.

Needless to say Matty, who was recounting the story, remained cool and aloof throughout the sordid carry-on.