I see this all the time. I have hung out at many different "posts" (American Legion, VFW, etc..) and you see embellishment of stories all the time.
I probably should be "hockeydad'ed", but I actually don't see much difference than sombody who "ate" themself out of a service and now get disability for "bad knees" or something. You see these types all the time, and they wear a bunch of "vetereans" clothes and tell some stories. Not the same level, but decietfull none the less.
I have seen people fake illness and be medicaly retired. They are just as bad.
You see it on street corners and I find it sad. I never give money to somebody with a sign that says "homeless vet", unless I have time to talk to them. Doesn't take long to figure out if they are lying. Still, I don't waste my time chastizing them, rather turn away in pity.
I don't feel it cheapens my service a bit. I have sat on Administrative Separation Boards and voted to separate Marines under other than honorable (OTH) conditions. Sometime those were really good guys that just couldn't follow some rules. The last one I did was an MP. Good young man, just couldn't stay out of trouble. If he told a few war stories, I wouldn't be mad.
I do realize this guy had no service whatsoever, he just came off pathetic to me. Trust but verify.
Gringo