MEXICO CITY—When shooting broke out between army soldiers and drug traffickers at Mexico's most prestigious university on March 19, two people were left dead and an entire campus was in shock. The bodies, authorities said, belonged to two hit men.

Then came another shock: Javier Arredondo and Jorge Antonio Mercado weren't assassins, but two graduate students caught in the crossfire at the Monterrey Institute of Technology and Higher Education. The Attorney General's office said the original account was wrong, and blamed the...