Sports Illustrated On Campus has an article about Krzyzewskiville.
They didn't do much digging for history, though, since they missed something:
According to Duke lore, Krzyzewskiville was founded in 1986 when 15 or so students, juiced from a night of quarters, decided to rent a tent from U-Haul and pitch it on the quad on a Thursday night in anticipation of that Saturday's North Carolina game.
We know people were camping out (longer than two days) for Carolina games at least back to 1977, if not earlier.