Thank you all for your support and advice. I appreciate it greatly. Here is the latest.

When I was alone with the coworker who told me about that comment, she confirmed that he, in fact, did say that I was "fu_d up." I wrote to the manager and asked him to note this, whether or not he thought it was hearsay and to please talk to the gossiper.

I also contacted my Union and they told me that they could help if this behavior continued.

Yesterday the gossiper called me at work (he works the earlier shift) and told me that after thinking about it, he remembered that he did say the I was "fu-d up." He told me that it was in the context of the other person complaining about me. And today he went on about how he feels like he is in the middle of a conflictual relationship between me and the other coworker. It is true that she and I often butt heads. He also went on about what a difficult person I am to work with -- did not give me specifics today. He suggested a mediation session to which I enthusiastically agreed. The other coworker with whom I butt heads does not agree to mediate. She wants to document his behavior and actions and take it to our manager. If that does not help, she told me that she will go to plan B. She also has problems with this coworker. I want to proceed with the mediation with the gossiper and have a Union rep present.

Despite his admitting that we all have a role to play in what is going on, I feel that the gossiper is manipulative and is just trying to pit me and the other coworker as the bad guys,