...what I have always personally done is to make the tavern tales text a brief summary of what was heard:
You overhear a tale about a dwarf who went into the mountains to the west to recover a magical hammer but never returned...
I did something similar in Oddities
. I used this Journal Entry 9 from Pool of Radiance as a inspiration/template for labelling my summaries: JOURNAL ENTRY 9:
Several pieces of paper with highly organized writing.
Fact: Joran Alberach is a special envoy, from Zhentil Keep, to the City
Council of New Phlan.
Strong Rumor: Here to negotiate a military assistance agreement between
Zhentil Keep and New Phlan.
Rumor: Zhentil Keep wants an ancient powerful artifact in return for
their military cooperation.
Rumor: The New Phlan City Council has such an artifact that was found in
the ruins of a recently reclaimed building.
Vague Rumor: Joran Alberach wants the artifacts for himself, not for the
rulers of Zhentil Keep.