One group is aware that there ain't no such critter, and acknowledges that Chazal (the Sages of the Talmud) shared the mistaken beliefs of everyone else in these things. They follow the approach of Rav Samson Raphael Hirsch, who wrote as follows:
"Imagine if a scholar such as Humboldt had lived in their times and had traveled to the ends of the world for his biological investigations. If upon his return he would report that in some distant land there is a humanoid creature growing from the ground or that he had found mice that had been generated from the soil and had in fact seen a mouse that was half-earth and half-flesh and his report was accepted by the world as true, would we not expect Chazal to discuss the Torah aspects that apply to these instances? What laws of Tum'ah and Taharah apply to these creatures? Or would we expect them to go on long journeys to find out whether what the world has accepted is really true? And if, as we see things today, these instances are considered fiction, can Chazal be blamed for ideas that were accepted by the naturalists of their times? And this is what really happened. These statements are to be found in the works of Pliny, who lived in Rome at the time the second Beis ha'Mikdash was destroyed, and who collected in his books on nature all that was well-known and accepted in his day."
This group of people has the correct approach, and is thus of little interest to me.
The second group consists of people who are entirely unaware that no such creature exists, and are completely confident in the absolute factual truth of everything in the Gemara. The weekly booklet Me'oros HaDaf Yomi took it for granted that such a creature exists, and happily cited R. Yom Tov Lippman Heller's view that it presents evidence for creation ex nihilo.
This group of people has an incorrect approach, but it doesn't bother me or interest me that much. In some ways, I am jealous of their simple faith; I have little desire to change their minds.
The third group of people is the one that intrigues me. These are the people who are pretty sure that no such creature exists, but cannot bring themselves to say so - either because they are genuinely uncomfortable with the notion that Chazal could be mistaken, or because they are afraid to publicly say so. And so they have a mighty struggle with this mouse.
One person told me this week that he had heard of a certain Rabbi in Bar-Ilan's Beis HaMidrash program (i.e. not the academic departments) who claimed that the Gemara was, in fact, referring to a type of snail. Leaving aside the question of how a snail can be part dirt and generated from dirt, there is the rather obvious problem that there is a perfectly good word for snail, chilazon, rather than achbar, which always refers to a mouse.
When Rav Aharon Feldman from Baltimore switched sides regarding the controversial ban on my books, and decided to insist that Chazal were infallible in science, I asked him if he really believes that there is a mouse that is generated from dirt. I knew that he was a worldly person, and so I wanted to see his response. Rav Feldman replied that scientists are constantly discovering new and amazing phenomena - why shouldn't it be true? I received the impression, though, that he was trying to convince himself rather than me.
I posed the same question to one of the rabbis that had endorsed one of my books but was retracting his haskamah out of deference to Rav Moshe Shapiro, who insisted that Chazal were infallible. "Do you really believe that there is a mud-mouse?" I asked him. He paused for a while, and then said, "I don't know." I argued that he wasn't being honest with himself, but what I should have pointed out that Rav Moshe Shapiro demanded that people believe that there definitely was such a thing, not that they do not absolutely deny it!
If anyone here attends a Daf Yomi class, can you post a comment saying what the maggid shiur said about this topic?