There has not been much in the US press, but this story was in a number of Latin American newspapers in 2005 and 2006. Some are no longer available online. Here are two:
Here’s a version from Brazil.
Here’s one from Argentina.
and
Here is the cached version in English from Cuba's Prensa-Latina
The political gossip blog Wonkette wrote the story up here:
We Hate To Bring Up the Nazis, But They Fled To South America, Too
and they include some research and documentation as background for the story.
The Democratic political blog Daily Kos has a diary that links together even more of the information:
Resurrecting the Bush (Huge) Land-Acquisition-in-Paraguay Story
including links regarding the underground aquifer, natural gas, the Rev. Moon, immunity agreements, a US military base nearby, etc.
The State Department issued and oddly specific denial of these stories in October 2006.
United States Has No Plans for Military Base in Paraguay
This story was one of the top 25 most censored stories of 2007, according to Project Censored:
US Military in Paraguay Threatens Region
and this story was one of the top 25 most censored stories of 2006:
U.S. Uses South American Military Bases to Expand Control of the Region
And in a somewhat related story about Ecuador from the New York Times May 12, 2008:
Ecuador Opposes Outpost in American War on Drugs
MANTA, Ecuador
— The scene at the Manta Ray Cafe, a mess hall here at the most prominent American military outpost in South America, suggests all is normal.
...
But by next year, if President Rafael Correa gets his way, this base will be gone, and, with it, one of the most festering sources of controversy in Washington’s long war on drugs.
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