Hi Everyone - As my old friend Marcus Bines has appeared and guessed more or less correctly (thanks in part to his insider knowledge), here's the answer a day earlier than originally planned:

Yes, 2 is the lie, but it is mostly truth. A friend of mine in another city carried out the road sign prank and it did indeed result in the tailbacks, and so forth. After finding the story hilarious, a couple of friends and I drunkenly attempted to replicate the prank, but without the same result. So, for the next few years I merged the incidents because, as Marcus pointed out, printing the legend made for a better anecdote.