I first came across this legend when I read the Monocled Mutineer about fifteen years ago, where mention was made of deserters hiding out in the country round Etaples. James Hayward's Myths & Legends of the First World War mentions the story, albeit briefly. He quotes Osbert Sitwell, who claimed that the story there were bands of deserters of all nationalities, hiding out in parts of the front line, existing by brigandage and scrounging was widely believed by the troops. Heyward also quotes from a 1920 memoir which mentions a story about the abandoned Somme battlefield told in 1917, he ends his discussion with the note that the story formed the basis of the 1985 novel No Man's Land by Reginald Hill.
But it appeared in fiction long before that. The novel, Behind the Lines, by WF Morris (1930), published in the States as The Strange Case of Gunner Rawley, makes use of the idea for much of its plot. I'll discuss the book in more detail in another post.
It's a pity Hayward didn't do more than just mention the story in passing, because of course the usual end is that after the war the authorities rounded them up and shot or gassed them all. Urban myth, or was there perhaps more than a little truth in it?