Normally, I'd suggest that your boss read Peopleware, but that's probably how he got on this kick because (as I remember), this issue is addressed there. Apparently, there have been studies that show that people are less likely to find "shortcuts" to problems. It's funny though, that one of the main points there is that developers need a quiet environment to be productive.
For me, I tend to agree that almost all types of music reduce my abilities to solve problems. For repetitive stuff, like writing documentation or maybe certain types of specs, it's fine for me. But YMMV.
However, that doesn't mean that a boss should create rules like he's trying to do here. He has a small penis, almost for definitely. He's flexing his muscles. It might be better for him to identify employees that are having trouble and work with them 1-on-1 to come up with a plan to address the issues. There will be more than 1 issue for some...and less than 1 for others. So a case-by-case basis is the best approach. But that's too much work and it doesn't prove to everyone that his penis is actually "quite big".
At various points in my career, I've been a manager. So I understand your manager's problem, but he's making it worse (for the record, my penis is "average sized"). A better approach might be to talk to each developer individually and bring it to their attention that listening to music has been shown to decrease productivity (provide them with something to read about it) and ask them for their thoughts. Also ask if they'd be willing to give it a try. That approach may work in a group too. If the developer is unwilling to give it a try, then maybe they are a problem.
Now, noise in a cubicle environment is a huge problem. Get creative about it. This is actually an opportunity for you to take a leadership role. Maybe developers could work at home for part of the day. Maybe the company could spring for noise canceling headsets.