It was the same thing as "torpedo juice" a powerful alcoholic brew but having many potentially lethal other elements in it if brewed wrong or if you drank too much.
Another problem however was the inconsistency of the fuel that meant that one batch might be drinkable while the next could be very toxic. If 1,000 died at one time it was most likely that they either got a batch of fuel that was made from Methanol instead of Ethel alcohol.
Buzz bomb juice was more common after the war during the occupation and the casualties were most often allied troops.
I never heard of the incident you are referring to but these things are all too common in war.