My little sister (who has two young kids who watch Blue's Clues) was telling me that exact same story about two years ago. She said some of the "mothers" in the neighborhood had been talking about it. Then I did the same thing you did -- a Google or Yahoo search -- and was relieved to find out that Steve is alive and well. I called my sister to let her know, and she was surprised because she said that this rumor had been circulating for quite some time, but no one ever thought to verify it. So, has anyone heard Steve's new band?

You can check most urban legends at snopes.com:

Here's the one on Steve.

It may be a leap from kiddie show to indie band, but it's just as big a leap in the opposite direction.

Just noticed that we're getting Blue's Clues-related ads from Google now. Heh.