Let me begin by saying that this article is an anecdote, and not a research article. At best it’s a starting point for discussion.
I am in Panama this week. I struck up a conversation with our Panamanian guide, and asked her how Panamanians reacted to McCain’s run for the US Presidency. She said that the people were very surprised to learn that John McCain was “Panamanian.”
It is now generally understood in Panama that John McCain was born in the Panama Canal Zone. However, our guide said that those born in the zone (herself included) have dual citizenship, American and Panamanian.
The whole McCain ineligibility theory, I suppose, was never very well developed. It took two forms: the fake birth certificate that showed him born in Panama outside the Canal Zone, and the claim that the Canal Zone lacked the kind of jurisdiction that would have made McCain a natural born citizen. They never delved into whether McCain was also a citizen of Panama by virtue of his birth in Panama (in particular in the Canal Zone).
I daresay that if John McCain had been elected that we would not see the same kind of dual-citizen argument raised against him that we see against Barack Obama.
I found this article from the Washington Post that gives further details on McCain’s birth in the Canal Zone.
Further research into this issue reveals that in order for McCain to have acquired Panamanian citizenship, he would have had to register his consular birth certificate from the Department of State with the Panamanian birth registry.