I would not be surprised if his whole schtick was a lie.

Hmm... here's the flash of speculation I just had, while tucking my kids into bed: what if there really was a man named Amon who had had those experiences, and in his despair he asked the spirit world for help... and ended up being possessed by a malevolent spirit. Maybe even Koh the Face-Stealer -- maybe he wears the mask not because he's scarred, but because his face keeps changing!

I don't know... the mention of spirits just seemed important to me, plus there's the fact that Korra has said that she's pretty clueless when it comes to the spiritual aspect of being the Avatar. She wouldn't necessarily sense that she was in the presence of a spirit or anything.