chinese whispers and telephone

Cathy wrote the other day to ask:

I've been watching "The Amazing Mrs. Pritchard" on Masterpiece Theatre in the US. [...] I noticed an interesting phrase Mrs. Pritchard used, "Chinese whispers." I thought at first she meant what Americans mean when we say children are playing telephone or whisper down the lane. Then I thought, in the context it was used in, that it wouldn't be appropriate to suggest the person was playing a child's game. Mrs. Pritchard's right hand man (I can't remember his title) has passed on a bit of gossip that was passed on through several people. Any thoughts?

Coincidentally, the night before, Better Half and I had been watching the episode of Curb Your Enthusiasm in which Larry David (surprise, surprise) makes a faux pas in playing telephone at a party, and BH asked, 'That's Chinese whispers, right?' Chinese whispers and the telephone game are indeed names for the same game in BrE and AmE, respectively. (And this came up once before in the comments for a previous post.)

What has thrown Cathy off is the fact that Chinese whispers is much more likely to be used in an extended or metaphorical way than this sense of telephone is. This is probably not too surprising, since telephone has other senses that would make the metaphor less clear. The OED lists Russian scandal as having the same two senses as Chinese whispers (though I've only ever heard the latter):

(a) a game in which a whispered message, after being passed from player to player, is contrasted in its original and final versions; (b) gossip inaccurately transmitted

People disagree about whether Chinese whispers should be avoided due to racist connotations. It makes me a little uncomfy, but then I don't find myself needing to say it very often, so I don't worry about it too much. It also reminds me of an AmE term (at least I've not found a BrE speaker who knows it yet---but I haven't asked that many) for another silly pastime with an ethnically (BrE) dodgy name: the Chinese fire drill. Wikipedia describes it as:

A Chinese fire drill is a prank, or perhaps an expression of high spirits, that was popular in the United States during the 1960s. It is performed when a car is stopped at a red traffic light, at which point all of the car's occupants get out, run around the car, and return to their own (or go to other) seats. Chinese fire drills are sometimes executed when one needs to get something from the trunk of a car. Occasionally, if one of the participants is late to get inside the car, the others might drive off without him/her. People have reported this phenomenon as early as the 1940s, so it is possible that the phrase was current at the time, but simply was not written down that early.

The term is also used as a figure of speech to mean any large, ineffective, and chaotic exercise.

When I was a child (a bit later than the dates in the Wikipedia article), the driver never got involved--because the driver was Mom or Dad. But we'd try our luck and yell "Chinese fire drill!" and judge how much trouble we were going to get into for trying to do it before opening the car doors. It always sounded like a marvelous idea to my young mind, but I don't know that we ever executed a true Chinese fire drill.