Like everybody said, this is nothing more than a rumor. However, many people believed that this was a possibility for an alternate ending, because the line where Littlefoot says, "Now we'll always be together" was cut out. To some people, this line indicated that they the Great Valley was like a safe heaven, implying that they had died and reached the Great Valley in heaven. This of course was absurd, because in that logic every single one of the gang's parents would have died as well, but there is no such hint of that happening.
So don't believe anything you hear about the gang dying. The ending in the movie is the truly intended ending.