A couple comments on this:
1.) As most people probably realize, it's nearly impossible to prove that something didn't happen. I've heard this 'rumor' over the years and to date have simply not seen any evidence supporting it. It's not a question of being angry or anything. It's just a simple matter of searching for the truth behind claims that some people accept as dogma without really knowing whether they're actually true or not.
2.) I don't expect Vanderbilt fans to take my word for it. But when someone like Bill Traughber (who is essentially the equivalent to Vanderbilt basketball that Russell Rice was to Kentucky basketball) states unequivocally that the benches were not moved due to Rupp, then that should be taken as pretty authoritative, unless someone can provide actual evidence showing the contrary.
It's on the page, but what Traughber told me was:
"When they built Memorial they wanted it to be used for other purposes than basketball. Therefore the floor was raised for plays and other campus performances and events. Putting the benches on the sidelines blocked the view from premium seats. There was a time they tried to put the benches on the sidelines down on the floor by the seats. But the players had to climb up onto the floor. So it went back to the end. I can tell you as powerful Rupp was with the SEC, Vanderbilt would not yield to his will since they built the gym to be competitive and take basketball serious and to beat Kentucky."
3.) The evidence that I was able to find does support that Vanderbilt started out on the endline. Again from the page, there's a photo from 1952 which clearly shows the benches in the corner along the endline.
Note that the photo that was provided by OriginalChiDore, which shows a shooter from directly in front of the goal may not necessarily be indicative of where the benches were actually located, since the bench may just be out of the picture.
It would be more useful to find a photo where the benches are actually shown on the sideline.
4.) Traughber did indicate (in the quote above) that Vandy did try at some point moving the benches to the sidelines but it didn't work.
Did Rupp complain at that time? Maybe. I've asked for specific time frames as to when these changes were made, as that would make it much easier to try to locate any quotes or articles associated with the changes, but to date no one has provided any details.
And yes, certainly there would have been newspaper articles etc. about such a move, especially if it was dictated to Vanderbilt by Rupp and/or the SEC office. Fred Russell of the Nashville Banner, for example, had a daily column which he certainly would have discussed it. In addition, the SEC meetings were covered by the newspapers and there were also minutes taken as well, so if would be pretty straightforward to track down if they had done something like this.
5.) Related to #4, I have asked a handful of times on Vanderbilt message boards specifically about this and no one has ever been able to provide any details whatsoever.
Again, that doesn't prove that it didn't happen, but it does call into question exactly what the basis for this rumor is, especially since it makes no logical sense.