As mentioned in today's review, here is the evolution of the Owlbear's art.
As a reminder, here's the random drug store toy that inspired Gary Gygax to create an "owl bear":
And here, from the 1975 Greyhawk supplement, is the first published art of the creature:
Quite a departure! You'd never know that was based on anything. However, the 1977 Monster Manual was much less creative:
We're all agreed, that's obviously a kappa, right? Well, maybe, maybe not; a lot of the "Prehistoric Animals" monsters sold in those bags of toys were based on the monsters that fought Ultraman. None of Ultraman's official enemies match the owlbear's inspiration, but (as ridureyu said down in the comments) there are magazine illustrations of fan creations that do look similar:
No original toy has ever surfaced that this knockoff might be copying, so it's possible the Hong Kong company, casting about for things to pad its numbers, paid to have its own creatures made, using a magazine like that as a source for designs. Meaning the grandfather of one of D&D's most famous creatures could be some unknown otaku's kappa-influenced OC.
I can maybe give you that that is a misrepresntation of a kappa... but I don't see how Gygax could've seen it as a cross between an owl and a bear. The power of imagination for you, eh?
But, boy, that Monster Manual illustration is pretty sad in comparison. It's about as crazy as how Floro Dery supposedly designed and named the Sharkticons after sharks, and I remember the Transformers wiki even having a note going, "He must've seen some crazy-ass sharks".
That toy looks like it came from an Ultraman series. Probably was a bootleg that Gygax bought
Honestly, I also considered it being a bootleg Ultra kaijuu, but for the life of me I couldn't think of any that resemble that design. Plus, I'm not sure Ultraman was even a thing outside of Japan at the time Gygax was coming up with DnD.
I know that some stuff was aired with a dub in the 70s.
Besides bootleg toys are usually just part of mass lots of merchandise for cheapo stores, not somethingspecifically sought out. I think there may have been an article about it on Cracked.
Original Kaiju Do Not Steal
This goes deeper than it seems - and it is related to Ultraman, but not QUITE. Based on research by minifigure collectors a little while back, we found that the whole "fantasy dino" set is not based on specific Ultra Kaiju... BUT there were illustrations of fan monsters that matched several of those monsters, and although we also can't find original Japanese toys of said monsters, it seems that somehow the magazine illustrations found new life. The unfortunate thing is, I had images of those magazine scans years ago, but several computer crashes have lost them. I can ask around and see if anybody else knows, though. But they are Ultra-connected, albeit in a way that suggests they were bootlegs to begin with. For something similar, the Kinnikuman minifigures also had "pachi" bootlegs that were completely original (like the mickey mouse-head Kinkeshi), and they are barely documented, so it's likely that the "original" minifigures were super obscure and lost to time.
Hahah. Never underestimate the research capability of passionate geeks, nerds and assorted fans, eh?
But you're right in that that initial design is something that could crop up in an Ultra series, but based on its appearance I would've thought it'd be something that would appear in a manga or magazine illustration than in an actual show. Something about the design just feels like costume designers wouldn't really go for it, maybe because it doesn't look like something that could be refurbished and reused as a different kaiju.
It would really be a shame if your scans and research were lost, since I don't imagine there are that many scans of those magazines left.