Yes, that's where the line Johnny is a rich man comes from. Also, there are references to Dick Dale. See our fairly incomplete entry in the Discopedia here:
If you listen to "Down in Bermuda" (Live Version)...he pretty much tells the story...
...By the way, I like your username Mr. Bunuel.
yeah, he does. And I've read more about it. How he thought his band was too loud so he kept them turning down and down until all that was left was the drummer hitting the side of his snare.... but it was still too loud!