Not a hoax, I've got a news clipping from the Oregonian (November 15, 1993) about the bike, with a pic of a man grasping the front wheel of the bike. The man, who lived in Vashon at the time, theorized that the bike had been there some 40 or 50 years.
I've been there - it is real, and very cool to boot. This isn't a hoax, staged or anything of the sort - just an example of what Nature will do if need be.
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http://www.roadsideamerica.com/tips/getAttraction.php3?tip_AttractionNo==1412
If this is real, it was obviously set up a long, long time ago, and never touched since. Dubious, but not impossible.