I doubt there's any kind of "must live so many miles from city X" rule.

One of the official's on Tony Corrente's crew is from the Twin Cities, and his crew worked the Minnesota @ Green Bay game in Week 8. The members of an NFL crew live all over the country... if you had a mileage restriction in place, no crew would be eligible for any game.

I think this confirms your statement:

On November 23, 1986, Chicago native Markbreit worked as an NFL referee at Soldier Field for the first time when the Green Bay Packers visited to play the Chicago Bears. In the second quarter of the game, Bears quarterback Jim McMahon was intercepted, and as he watched the proceedings downfield, Packers defensive end Charles Martin picked up McMahon and slammed him shoulder-first into the AstroTurf. Martin remained hovered over McMahon on one knee, taunting him, until Bears' offensive tackle Jimbo Covert barreled full-speed into Martin. Markbreit ejected Martin from the game, despite strenuous protests from Packers coach Forrest Gregg. It was Markbreit's first ejection as an NFL official. When describing the penalty, Markbreit stated that Martin "stuffed" McMahon into the ground.

Martin was suspended for two games by NFL commissioner Pete Rozelle, the longest suspension for an on-field incident until Tennessee Titans defensive tackle Albert Haynesworth was suspended five games by commissioner Roger Goodell for stomping on the face of Dallas Cowboys center Andre Gurode during an October 1, 2006 game [6]. During the game, Martin wore a "hit list" towel with the numbers of several Bears listed, including those of McMahon, running back Walter Payton, wide receiver Willie Gault, and center Jay Hilgenberg. The call was largely credited by the media and NFL executives in helping Markbreit land the assignment as the referee of Super Bowl XXI two months later.

Know for "sure?" No. But, I know for a fact that Tom White (former NFL referee) lives in or near Washington Township, NJ. WT is about 20 minutes from Philadelphia and Tom worked several Eagles games in his career. And, I met Ed Camp who is from Northern New Jersey who has worked Eagles v. Giants games. So, I'm pretty confident you have you answer.

In last years AFC Championship game (BAL/PIT), the BJ was Tony Steratore who lives in the Pittsburgh suburbs....

Having met Markbreit, I asked him about this incident, and he openly admitted that this is true.