Now this is the type of subject that is really worthwhile speaking about. Of course I believe this incident happened. It has probably happened more often than we have all heard about. And yes, I have done flaps 1 takeoff in 737-200.
I agree with all of the previous posts about taking your time to manipulate a switch and being SURE that you are doing the correct one.
Someone mentioned the trident and retracting the droops as I think British pilots call them. This ended in disaster with an apology on the CVR if I am not mistaken.
Some will remember the MD80 operated by northwest airlines in the USA. It took off with no flaps or slats extended and crashed killing all but one child in Detroit.
Stall recovery on the DC9 series at one time was: FIREWALL POWER, FLAPS 15! ( low altitude stall of course)
This would give you the best of both worlds, power and increased flaps/slats. They came out really fast! (bam)
Fatigue, carelessness, inherent design flaw, the human condition and a good measure of MURPHY's Law played a part I am sure in your described incident.
j