While Secretary of Defense Donald Rumsfeld may not have signed a ban on new consumer digital-imaging technologies, he did express clear concern about the unforeseen impact of such technologies during the Senate Armed Services Committee hearing on May 7.
"People are running around with digital cameras and taking these unbelievable photographs and passing them off, against the law, to the media, to our surprise, when they had not even arrived in the Pentagon," Rumsfeld said.
Camera phones have been banned in many other places - school locker rooms for example - on privacy grounds, so the story's far from absurd. And it may yet turn out that the milspec restriction effectively does ban most camera phones. But for now this looks like it was a nascent urban legend.
Maybe those Ozzie reporters were confused by humorists, who were again ahead of the curve on this one.