Years ago I had this English teacher (from UK) who asked us to translate American Pie to Swedish. A quite difficult task of course :). Anyhow, he told us that "Drove my Chevy to the levy but the levy was dry" meant I drove my Chevrolet to the movie theatre but the film was dull. Anyone else who has heard this?
It's "levee." Levy is somebody else. "American Pie" is Don McLean's song about the change from the (supposedly) golden era of 1950s America through the turbulent 1960s as reflected in pop music. A levee is a quay or a dike along a river to control flooding, in any case, a place where you'd expect to find water. But in the song, the water is missing. This is likely an allusion to the 1950s variety show featuring music of those years and hosted by singer Dinah Shore. During the program, she sang a song to accompany a Chevrolet car commercial. The song rhymed "Chevy" with "levee." To take a look and a listen click here. In the song, those times symbolized by Dinah Shore and the contemporary music are gone like the missing water that's left the levee dry.
Speaking as an American who is roughly contemporaneous with Don McLean, I'm afraid you were the victim of a British teacher who had no concept of 1950's US culture. Except, perhaps, what he'd read in the magazines.
The first verses of "American Pie", that is, the verses preceding the second chorus, place the singer as a high-school student in the US south. (This despite the fact that McLean himself went to prep school in New York.) He has a paper route, he drives a pickup, he goes to dances in the high school gym. He knows a bunch of "good ole boys" and drives to a levee. As Wikipedia points out, US use of "levee" is pretty much restricted to the Midwest and Deep South, and "good ole boys" refines the location. It's not actually clear what "the levee was dry" means, but part of American Pie's charm is its ability to mash up phrases and keep going. An entirely reasonable interpretation (hampered by the fact that McLean grew up entirely in the Northeast) is that the local teenagers would get together out on some levee to party and get drunk, although that's such universal behavior that McLean should have had no trouble visualizing it.
The next "ten years", of course, were the '60s, and the less said about that the better.
Finally, I draw a complete blank on any connection between "levy" and movie theaters. An uncharitable suspicion is that your teacher confused "levy" with "marquee".
Other than the correction of the word "levee" (not 'levy', like taxes), everyone's interpretation of the song is just that, their interpretation of the song.
Don McLean has never given an interpretation of the whole song - just allusions to the general meaning. Here's one place recently: http://www.huffingtonpost.com/2015/04/08/don-mclean-american-pie_n_7024486.html