It would seem that the song may have been circulated on the variety stage:

The Billboard (NYC) (Dec. 28, 1918):

"George A. Clark, the featured comique, and his side pal Harry Seheppell, were in the hobo class and typical of the tribe that flop under the cigarette trees up on Rock Candy Mountain on the shores of Lake Lemonade."

The Library of Congress lists a copyright entry for "That big rock-candy mountain, words and music by Billy Mack...Dec. 10, 1928."

"Big rock candy mountain" was copyrighted by H. L. McMurray of Miami Beach on May 11, 1931.

The Daly City [Calif.] Record (Sept. 21, 1934), referring to 1909:

"Colma Valley had many interesting characters, and 'The Bear' (that was the only name we ever knew) was noted for his fog-horn voice that would make any ordinary fog horn blast sound like a whisper. 'The Bear' was also noted for truthfulness, and no one doubted the story of hi island a few leagues west of the Farallones, where he said there was a rock candy mountain from which rivers flowed pure whisky. The only way to reach this island was with a balloon, which accounts for the idea of some skeptics that the story was hot air."

The Electrical Workers Journal (Feb., 1938), calls "The Rock Candy Mountain" "an old lineman's classic," but it doesn't say how old.