I have a biography on him 'H.P Lovecraft' by L. Sprague De Camp...haven't picked it up yet though....
As for him making it up....according to that article his version contains many similiarities to the 'original'.
"The Necronomicon was written in Damascus in 730 A.D. by Abdul Alhazred."
Apparently Crowley had come across a translation and reiterated some information to a female friend who eventually married Lovecraft. It is surmised that Lovecraft might have never even seen the translations and just wrote the book based on his wife's conversations with him.
"It is easy to imagine a situation where Sonia and Lovecraft are laughing and talking in a firelit room about a new story, and Sonia introduces some ideas based on what Crowley had told her; she wouldn't even have to mention Crowley, just enough of the ideas to spark Lovecraft's imagination. There is no evidence that Lovecraft ever saw the Necronomicon, or even knew that the book existed; his Necronomicon is remarkably close to the spirit of the original, but the details are pure invention, as one would expect. There is no Yog-Sothoth or Azathoth or Nyarlathotep in the original, but there is an Aiwaz... "
Problem is, there are no known copies of the original left. Many of them disappeared during WWII...
http://www.digital-brilliance.com/necron/n...ecron.htm#Found
I love a good mystery....