Yes its true, according to the man himself Mark Motherbaugh who spoke with Deadline Hollywood about the new Lego Movie and quoted a very nice description of what circuit bending is, even dropping a few hints for people to investigate further.
“I used old retro synthesizers that I used from the days of Devo and then used circuit bending.” What is circuit bending? “If you go on YouTube you can see these people who pull out all these crazy, electronic Speak and Spells to Elmo dolls and Casio keyboards and combine the sounds. It’s circuit bending. These people even have their own circuit bent instruments. They are the vocabulary of modern music. So I looked at a lot of that gear, and I created this palate of electronic sounds.”