The story pops up because it's mostly true. The simul took place on Aug. 27, 1977 (so it couldn't have been in a 1976 book - though it was, in fact, in a later book, "The Complete Chess Addict" by Fox and James).
More convincing is an original newspaper article (the banner and article are a composite):
An other article:
Chess plan backfired CARDIFF, N.J. (AP)
Joe Hayden's challenge to play chess with 180 people simultaneously backfired. Only 20 people showed up Saturday and to Hayden's surprise and dismay, 18 beat him. Hayden, 17, beat only ,his mother and a man who withdrew from the contest at a shopping center here. The youth was attempting to break a record listed in the Guinness Book of Records, his mother said. To make matters worse, the chess enthusiast was beaten in just a few moves by 7-year-old Stowell Fulton of Atlantic City, another young enthisiast. "It was hard for me to concentrate, playing all those people."
—"Standard-Speaker," Hazleton, Pennsylvania, August 30, 1977, p.13
I believe this story first popped up in a 1976 book called Felton & Fowler's Best, Worst, and Most Unusual. This is one of many anecdotes from that book that will never die so long as there is an Internet.