Yeah, the rumor you're talking about goes waaaaaaay back and not only is it a distortion of how he actually works, but it fails to ackknowledge that nearly every film composer working these days does things in very similar ways (the notable exceptions being, of course, the old old pros like John Williams, John Barry, Morricone and Randy Newman).

An interview with Steve Bartek from years ago spells out Danny process (or least, what it was at the time). He works the basic cue out on a sequencer and lays in many of the samples and non-orchestral sounds that will be used in the final cue. He then makes a print out on which he writes - by hand! - much of the orchestral stuff and usually an additional 30-50% of what the cue will be. Elfman has admitted that his way of writing isn't exactly text-book, but Bartek has added that anyone who knows anything about music can look at it and understand exactly what Elfman is saying.

Since mock ups of EVERY CUE are required by pretty much anyone who does a film score these days, Elfman's team does that as well, but both Elfman and Bartek have been explicit that no one on the team is permitted to take too many liberties with the music.

In the recording process, some elements are replaced by the live orchestra, but some stay in the final mix (often the exotic percussion that he's recorded and layed down and any funky samples and synth effects that he wants in there).

Although he did not study at Julliard, his method of working has obviously proved successful enough for him to continue to deliver music on time to the people who've hired him. Love or hate his music, you have to admit that he's been able to write and record extremely complex, sophisticated pieces in a way that more than proves his chops as a professional musician.

By the way, many of the other big guys working today don't get as hands on with their music as Elfman regularly does. John Ottman works the whole cue out on a sequencer and lets his orchestrators and transcribers take it from there. Christopher Young's methood of working is quite similar, from what I hear, as is David Arold's and numerous other guys who are don't have to answer these bulls*** charges every few years.