I admit from the start to not being an expert but only a relatively informed amateur. That said I'll give my views, which will no doubt be unpopular with some here.
There are some good Western writings on traditional Taoism such as the work of Jean Cooper.
Also for me at least Western and other Oriental ideas have helped me understand Taoism(and Buddhism.) better because of the initial gap in conceptions between the West and the East. Most notably Platonist-Pythagorean theosophy, Cabalah, Sufism, certain Christian mystics, Vedanta and Buddhism could all be aids depending on one's knowledge and temperament. I would even go to say that there is a common esoteric core and wisdom to all these tradition, which is in essense one truth expressed diversely. However on the other hand each of these traditions speaks it own language, has its own perspective and is certainly a very distinct form which cannot be spliced with another and one must always be sure not to say Platonise or Vedantise Taoism(or Buddhism or whatever.) but to use one position to carefully conceptualise another without ever forgetting the very real, if ultimately perhaps relative and outer, differences.
So in that way the West has not butchered Taoism but can, at least for its own members, help it to be understood. For instance for a Westerner many statements about the Tao can be rather elliptical but some of this is confusion is cleared up if one realises that the Tao is ultimately very close to the Platonic One or the Advaita Vedanta Nirguna Brahman or even the Godhead of Meister Eckhart. Now this is what is in the Dharmic faiths known as an Upaya or relative but effectual truth, at the level of discursive thought the One is not exactly the Tao. There are nuances in perspective and one should not simply treat Taoism as a Chinese Platonism or Vedanta, and after all Plotinus, Shankara and Laozu all remind us that the One/Tao/Brahman is ultimately beyond the level of words and mental conceptions. However there is still a core of useful truth in the comparison, and I certainly think it is a better position than much of Western thought on Taoism or Buddhism. It also reminds us of the somewhat artificial nature of the Western divide between "philosophical" and "religious" Taoism.
And this brings us to the negative Western conceptions of Taoism(and Buddhism.). Put quite simply much of what passes for Western thought on Taoism(and Buddhism.) is nonsense. The West has become increasingly closed to the real spiritual nature of its own traditions and this makes it very hard for it to understand the Eastern traditions, still replete with real spiritual perspectives. This is why you get a lot of Western Taoism and Buddhism which has little in common with the profound depth of these traditional faiths but is very egoist, individualist and ultimately anti-contemplative. Taoism is not whatever one wishes it to be, that is why "religious" Taoism grew up. It was not alien to the writings of Laozu and Changzu but was largely an elaboration on the truths of their work in ways that could be spiritually beneficial to the populace.
In reality, and contrary to one of the above comments, you do need to follow the practices of "religious" Taoism to get anywhere with Taoism as a spiritual path, whether you are looking for an esoteric path or simply the salvific path of the average, genuine faithful. This is because you are human. You need the discipline and support of a tradition that has been elaborated from the main, original sources of Taoism based on real and broad spiritual understandings of them. You are unlikely to be able to achieve this without submitting to the traditional practices and I've yet to come across a Western Taoist who has gone their own way and it has worked. To go back to the classical Western analogies Taoism is not akin to the degenerated, Pantheistic Stoic doctrines which saw nature as simply the sum total of the physical universe and taught that man should simply adapt his will to this conception. No it is akin to the Eleatic-Pythagorean-Platonic doctrines where the One is both the universe and infinitely more, it is the absolute, the infinite, the Good, the Beautiful, the Truth indeed the Supreme Quality. The universe is but a relative manifestation of certain possibilities within this limitless all-possibility and also a reflection of it, within ourselves there is also a microcosm that reflects and has direct access to the macrocosm of the absolute. Our goal then is not that of certain Stoics, to live simply in accordance with nature in its most gross and material sense but to live according to our true nature, which is living according to true nature of the One, of God or the Tao. This is not something that we simply achieve idly, with no spiritual effort, by living as we like. It is done by remembering, by using our knowledge and our inner Intellect which is beyond mere discursive thought but is a direct spiritual intuition which unites knowing and being and it is done by taking us beyond the relative plane of the universe, beyond accident to the absolute plane of substance, of the One. It requires meditation, the suppression of temptation and worldly attachment, the cultivation of inner virtues and most especially the already mentioned use of one's Intellect; the eye of the heart. So one can seen why if you choose the Taoist path it is essential you do not listen to Westerners who tell you to be a Taoist means simply to do whatever you want, that there are not set dogmas or practices. Instead you must follow what is often disparaged as "religious" Taoism. Even the esoteric and the mystic requires the support and discipline of such a tradition and of a spiritual master and guide.
