Just as it's dangerous to take everything the U.S. government (and press) says at face value, it's dangerous to take everything the BBC says at face value. The truth is probably somewhere in-between.
The most recent reports I've seen in the U.S. press say that Lynch sustained broken bones and contusions, but don't mention gunshot or knife wounds, so even though that was the initial story, there doesn't appear to be any effort to pretend that it's true. It seems unlikely that U.S. officials would knowingly misreport gunshot/stab wounds, simply because these things are, as we already know, subject to verification in the U.S. It seems more likely that in all of the excitement, someone guessed wrong and the rumor turned into a story. In light of the fact that 9 of her fellow soldiers were killed, probably by gunshots, and in light of the fact that Lynch was unconscious, it's not hard to see that happening. It's possible that someone deliberately fabricated the gunshot story, it just seems unlikely.
As for the nature of the rescue, we're told that an Iraqi lawyer took great risks in order to inform U.S. troops of Lynch's whereabouts, and no one has cast any doubt on that story. Also, even the BBC reports that the hospital was "swarming" with Fedayeen before the rescue. Therefore, it's not surprising that the U.S. would take every precaution and conduct a nightime raid. The BBC reports that the U.S. "knew" that the hospital wasn't being defended at the time of the raid, but doesn't provide any supporting evidence - how and when did they "know" this, and does it necessarily mean that they shouldn't have conducted a nightime raid? If I were a commander in the midst of a war, would I tell the hospital in advance that I was coming to get Lynch, thereby risking the lives of all concerned? Would I take someone's word for it that I could just walk in and sign Lynch out? Perhaps stop in the gift shop for a card and some flowers? I don't think so.
I don't doubt the doctors' and nurse's stories that they took care of Lynch as well as they could. It's also plausible that they made an effort to deliver her via ambulance. But neither is it surprising that this didn't work out, since they don't appear to have informed anyone from the U.S. that they were trying to deliver her. I'm not faulting them, just saying that I'm not surprised it didn't work out. We all know by now that the highway checkpoints were extremely tense.
As for whether the video was edited and overhyped, that doesn't surprise me. I don't necessarily like it, but as you say, propaganda seems to be a fact of life. I don't know if this case rises to the level of faking baby-killings, but I'm not surprised that U.S. officials would put a favorable spin on it.
Anyway, the true facts will probably emerge eventually - I'm just trying to demonstrate that the BBC isn't necessarily telling the whole story either.
From a thread on this at another forum
(not my post, but I agree with it)