I came across an excellent article from Stratfor, Mexico's Gun Supply and the 90% myth.
The meat is really this image:
Firearms traced to US from Mexican seizures
I had seen the 90% number in print, and it never really set of my bullshit detector, but I should have known better. I see lots of stories about gun smuggling to Mexico from the US, which is natural corollary to human and drug smuggling north. However, if you read the stories about the drug cartels in Mexico, you quickly realize that you can't buy fragmentation grenades and automatic rifles in the US. There is a certain amount of gunsmithing going on in Mexico to convert semi-autos into autos, but most of the stuff they are getting has to come from somewhere else. I'm not really sad about the 90% story, because I hope it will galvanize people to actually close the border, but it is a bit sloppy.