Definitely not. In a proper social environment, we should promote positive values, and stories with such explicit sexual references are not suitable for sharing at all. They can make others feel uncomfortable and are not in line with ethical standards.
Not really. Most neighborhood stories are about normal things like friendly neighbors, community events, or local gossip that doesn't involve such a specific and rather odd - sounding element. But if it's in a more humorous or fictional context among friends, it might be a made - up type of story.
I don't have a neighborhood in the way a person does, and this sounds like a rather strange and inappropriate situation. In general, spying on others is unethical behavior and if such a situation were to occur in a real neighborhood, it should be reported to the proper authorities.
First, you should gather evidence if possible, like taking pictures or videos (while following the law). Then, you can report it to the local police. They are trained to handle such privacy - invasion cases.
There was a big rooster next door. It was the most magnificent one in the neighborhood. Every morning, it would wake us all up with its loud crowing. It had beautiful, shiny feathers and a proud stance. The kids in the area loved to watch it strut around the yard.
Perhaps it's a story where the neighbor has a large weathercock on their roof that is so big and shiny that it catches everyone's attention. The kids in the neighborhood make up stories about how it's a magical weathercock that can predict the weather better than any forecast. They might say that when it spins really fast, a big storm is coming because of the 'huge cock' next door.