The ever engaging 'Ask a North Korean' column at NK news asks a North Korean what rumours she heard about the outside world while living north of the big 38. I think this one may have been seeded by the government:
We heard some pretty scary rumors about China, too. One was about a town called In-Dwejii (인돼지 / Human Pig) where the Chinese were rumored to be growing human beings in a pigpen – just like animals. People said you’d be sent to that town if you accidentally crossed the border, and if you did go there you’d never come back.