I think the rumorer meant the MP count is into "MF territory" at 42 MP, not that there's actually a MF sensor.
I don't know about the release dates, but the specs sound plausible.
The full frame with 1.3 crop option would ease the transition away from the 1.3 crop sensor, which is an orphan in terms of lenses.
A high megapixel flagship body satisfies the commercial pros that need maximum resolution and maximum size. Since sensor size is a major contributor to the cost of a body, this allows Canon to hold down costs while giving commercial photographers medium-format quality in a DSLR body.
No real opinion on the 5D III. Sounds reasonable.
Bottom line, there is enough logic in this rumor that it could be accurate, but then again, most of it is just common sense and could be imputed by anyone following the market.