The asbestos, if that is true, doesn't shock me ... I'm surprised they didn't use coke. Supposedly all sorts of crazy stuff went on in the making of that movie.
Buddy Epsen, originally slated to play the Tin Man (actually, it's a bit more complicated than that because he traded parts) almost died from the aluminum dust they experimented with as makeup.
http://www.snopes.com/movies/films/ozebsen.asp According to a memoir by Judy Garland's ex-husband, the Munchkins would put their hands up Judy's dress.
http://people.com/celebrity/teenage-judy-garland-was-repeatedly-molested-by-munchkins-on-set-of-wizard-of-oz-says-her-ex-husband/ The stoner Pink Floyd thing has been around as long as I can remember and there is actually a specific sync point between the music and movie. The whole album sync-up is on you tube ... I just posted the Emerald City scene.