I've heard somewhere that a good deal of what's known of Ungern-Sternberg came from Soviet/Bolshevik propaganda. The idea is that they deliberately colored the "Mad Baron" as a Complete Monster. Any thoughts?
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It certainly is a skewed view, I would say. While he was certainly a monster from a contemporary and modern Western standpoint, many people in Mongolia looked up to him at the time (after all, he seemed to promise them the return of their independence and former greatness), as did some White Russians who saw the Revolution as partly vindicating his particular worldview - hard to blame them, considering the Bolshevik atrocities.
The article says that he "horribly misinterpreted" Buddhist ideals, but local religious Buddhist authorities seemed to regard him rather favourably. That may have had to do with the peculiar Mongolian strain of Buddhism, which was always of a more martial bend that he could fit into pretty well.
That said the legend of the Bloody Baron could be said to be a collaboration between Soviet propaganda and Ungern-Sternberg himself. Even many White Russian officers later attested to his over the top cruelty and sadism.
This is mostly built on James Palmer's book, isn't it? "The Bloody White Baron" is nearly as embellished as Ossendowski's "Beasts, Men, and Gods". It botches many of the original Mongolian sources and goes out of its way to present Ungern as a bloodthirsty megalomaniac at all stages of his life — even when primary sources disagree. For a better source, I'd recommend "The Baron's Cloak".