As for the frequent adage that Russell is "God's favorite idiot" I haven't really been able to find a source for it.
In Mormon lore, ALL humans are the incarnation of angels who fought on the right side of the war in heaven, and I guess we were all just sitting around watching the Roman Empire and Genghis Khan and King Henry VIII waiting for our turn to be born. So saying Russell's parents thought he was an angel sent to Earth in disguise is misleading, as it wouldn't make him different than any other person who ever lived in Mormon lore.
It's also a frequent Mormon sentiment to say that the latest generation were the generals in heaven saved to be born in the end times, but again, that's the whole generation and not just Russell.
Like many religions, there are many beliefs commonly held by believers even if the leaders don't officially consider them canon, but the wikipedia page on
Mormon folk beliefs doesn't say anything about disfigured people being the angels who personally kicked Satan out of heaven so they were sent to Earth disguised.
People have said before that at most, Mormons, like many, consider the retarded automatically saved, and Russell himself frequently complains people think his face means he's retarded, so that's probably what Mormons thought about him.