The preponderance of the evidence now suggests that there's nothing there. One of the arguments that made me think there was some fire amid the smoke was the statement on Booman Tribune, attempting to explain that "why'd he" was being heard as "whitey." This sort of explanation suggested that someone — perhaps allied with the Obama campaign? Someone in attendance of the event? — wanted to explain what people would be hearing on the tape, which suggested that there was a tape, and that some words that sounded like "why'd he"/"whitey" could be heard. The listing of specifics of the comment — Medicaid/Katrina/Jena/Iraq — also suggested someone had heard the comment, and wanted to put it in context...But now I find that apparently Booman Tribune was merely paraphrasing another blogger's prediction of what would be on the tape if it ever surfaced. No one claimed to have seen the tape. (That will teach me to put any stock in anything written on a liberal blog.)
Without that, what are we left with? Larry Johnson, a vehemently pro-Hillary and anti-Obama blogger, who in the past was running around telling people Karl Rove was about to be indicted. Republican political consultant Roger Stone, saying he believes it exists. I'm hearing from other reporters that their (secondhand, of course) sources are calling back and adding that they saw Louis Farrakhan on the tape, a detail that they didn't mention before Johnson's update of 9 this morning. Does the presence of Farrakhan seem like a detail that's easy to forget?
If I'm wrong, I'm wrong. But right now I think the evidence suggests this is a hoax, and that we will never see tape of Michelle Obama saying these particular controversial remarks. The timing of this rumor's surfacing is conveniently perfect to scare superdelegates, and the idea that it's in the hands of sinister Republicans explains why fans of Hillary are eager to talk about it but unable to produce it.
UPDATE: I hear from many readers that Bob Beckel said Tuesday morning on Fox & Friends, that a "bomb" was going to drop tomorrow, regarding Michelle Obama. Asked if it was "worse than a college thesis?" Bob said yes, I am told. He said that the Republicans were behind it and it was dumb because it meant that Mrs. Clinton would be the nominee.
I note that despite my readers' hopes, this fits the pattern for rumors like this — they're always simultaneously vague but hyped to be huge, and they're always coming just around the corner. Like I said, if I'm wrong, I'm wrong, but this could easily be a lot of folks chasing the same rumors...