I know that about Trungpa - the drinking I don't mind but it's unforgivable to take advantage of people. That doesn't make his lectures or teachings any less valid. Shambhala was very important to me as a teenager so that influences my outlook.
"Free wheeling" was me trying to be light-hearted. Many of the Zen stories of Chan involve a lot of confrontation which wouldn't be allowed in a Zen temple, less about what Chan is than the way Zen stories viewed them. To be honest I don't know much about Chan Buddhism except via Zen. I lived in China for 7 years and almost everyone I knew who was lay Buddhist was more into the iconography and didn't practice (I never visited any Buddhist temple). This attitude is pretty universal, most lay Christians I've met also don't practice compassion. I'd rather people practiced and didn't care about the iconography, if I had a choice. It's hard to unravel what about the core teachings was talking to the audience and which are tools for transmission. I expect you and I draw the line at different places.
One thing I really agree with you on is stripping away the role of death in modern western buddhism. I've come to see Buddhism as preparation for death. Though honestly it's better to not to be preoccupied with it to be ready for it, and it will be far different than any story.