each version of events happened and is true

This is a cop out to let people form headcanon. Always.

Seriously, TES is a for-profit venture. If the lowest common denominator isn't right in his headcanon, it alienates a customer, so shit-memes like this crop up to make sure that even the dumbest argonian who hasn't got a lick of sense for decoding events from a text corpus of lying witnesses can be right enough to buy the next game without buyer's remorse.

/meta

How did the concurrent contradicting events at Red Mountain happen?

Lies, lies and damned lies.

Let's deduce: who has the most at stake for the truth getting out here?

Tribunal is number 1. They have the most at stake if the truth contradicts them. They have a whole fucking country under their thumb, and if anything rubs against their narrative, it could be the end for them. Imagine that. A whole nation -- your "godhood" nicked from you -- gone if the people find fault in your story.

Ashlanders (srsly, fuck calling this marobar sul's testimony) are number 2. They're the "losers" of history. They disagreed with the people who own the country they want to own. Listening to their story is like listening to a neo-nazi's retelling of WWII.

Dagoth ur is 3rd. His account is short, but if you're interested in muh nerevar, he's behind the ashlanders and all because...well, he's fucking crazy. He still has a stake in the whole resdayn joke.

The least unreliable for political reasons are the Nords...who contradict basically everyone. The nords lost, went home, and went about their business. They don't hold resdayn, nor do they lament about when they owned it. They're comfy drinking their mead and bitching about dragons and shor and all that dumb nord shit. They have no reason to lie specifically.

Best account of this, IMO, that takes into account, this precedent of "who should lie the most" is this

tl;dr, most of what you thought about red mountain is tribunal nationalist lies and the dwemer were allied with the chimer against the nords at red mountain.