This myth might finally be dead (or at least bleeding out)....

In 1896 Einstein enrolled in a four year program at Zurich Polytechnic. In 1900 the Polytechnic awarded him a mathematics and physics teaching diploma. Here is his Leaving Certificate...Marks are from 1 (lowest) to 6 (highest)...

Other than Physical experiments for beginners with a mark of 1 (maybe physical experiment wasn't his bag).

More myth debunking evidence can be found in this New York Times article from 1984:

EINSTEIN REVEALED AS BRILLIANT IN YOUTH

There is some great stuff at the Einstein Archives Online and it looks like the full collection is moving online...

...his entire archive of 80,000 documents held as a bequest by the university will be digitized and put online, thanks to a $500,000 grant...

You can't tell Newton F=ma is wrong if you can't do the math. Albert was one smart dude.