Check out these next two versions of that rhyme for some great examples of the way children's rhymes preserve, alter, and comment upon actual occurances, and celebrities.

Example #2 in particular has a wonderful example of folk etymology.

DOWN BY THE BANKS OF THE HANKY PANKS
down by the banks of the hanky panks where the bullfrogs jump from bank 2 bank signin eipps ippes opps oops chillie willy ding dong i pledge alligance to the flag micheal jackson makes me gag..coca cola brought him up now we're talkin 7up..7up has no caffeine now we're talkin billy jean..billy jean has no butt now we're talkin pizza hut , pizza hut has no bread now we're talkin really dead eippes ippes opps oops chilly willy ding dong- i know theres more but ijst cant rember!
*xoxo* -
christine on Wednesday, July 9, 2003 - 03:00 pm
http://www.streetplay.com/discus/cgi-discus/show.cgi?75/75.html

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RIVER SONG
Down by the river near the hankey pank where the bullfrogs jump from bank, to bank, and they say E I O U, your momma stinks and so do you so ping pong ding dong your daddy smells like king kong. Ask your teacher what she wears, polka dotted underwear. Not too big and not too small, just the size of city hall. Michael Jackson went to town, coca-cola brought him down. Coca-cola brought him up, now he's drinking 7up. 7up with no cafiene, now he's seein' belgain (pronounced beligene). Belgain is outta sight, now we're talking dynamite. 10, 9, 8, 7, 6, 5, 4, 3, 2, 1, BAM!
-Veggie; 8/21/2006; http://www.cocojams.com/taunting_rhymes.htm

-snip-

Here's some background about this rhyme [that some children who recite it may not know]:
That bit about "coca-cola brought him down" is a reference to an accident that occurred in 1984. 25 year old R&B singer Michael Jackson was singing his hit song "Billie Jean" for a Pepsi Cola [not Coca-Cola] tv commercial in Los Angeles when the special effects went wrong. The fire works set R&B singer Michael Jackson's jheri curl treated hair on fire.

http://news.bbc.co.uk/onthisday/hi/dates/stories/january/27/newsid_4046000/4046605.stm

Veggie's word ""beligene" is an example of folk etymology. That word comes from the song title "Billie Jean", a song Veggie may be too young to remember.