I have just been reading Kipling's autobiography _Something of Myself_ (with the OED, Google, & Wikipedia at hand) and have happened on the following, which should somewhat limit further speculation:

"...I wrote a song called 'Mandalay' which, tacked to a tune with a swing, made one of the waltzes of that distant age. A private soldier reviews his loves and, in the chorus, his experiences in the Burma campaign. One of his ladies lives at Moulmein, which is not on the road to anywhere, and he describes the _amour_ with some minuteness, but always in his chorus deals with 'the road to Mandalay,' his golden path to romance. The inhabitants of the United States, to whom I owed most of the bother, 'Panamaed' that song (this was before copyright), set it to their own tunes, and sang it in their own national voices. Not content with this, they took to pleasure cruising, and discovered that Moulmein did not command any view of any sun rising across the Bay of Bengal. They must have interfered too with the navigation of the Irrawaddy Flotilla steamers, for one of the Captains S.O.S.-ed me to give him 'something to tell these somethinged tourists about it.' I forget what word I sent, but I hoped it might help.
    "Had I opened the chorus of the song with 'Oh' instead of 'On the road,' etc., it might have shown that the song was a general mix-up of the singer's Far-Eastern memories against a background of the Bay of Bengal as seen at dawn from a troop-ship taking him there. But 'On' in this case was more singable than 'Oh.' That simple explanation may stand as a warning."

So! All we have to do now is unearth the original waltz tune, and discover precisely what Panamaing meant & why (the OED is unhelpful).