How I Killed Your Master/WMG

Everthing Liu Wong has said is a lie.
There never was a group called the Five Dragons, his father had no great style, he never trained under Fei Xian, etc. After all, if Xu Li is such a bad guy, why did Chan Sen follow him and feel the need to avenge his death? It's not even unprecedented in Wuxia; consider the film Hero.
 * Avenging the Villain and Even Evil Has Loved Ones. Also, take into account the possibility of character development on the part of Xu Li; when you compare the time difference between Wong telling the story to Chan Sen and the stuff Xu Li did, its possible the guy mellowed out in his old age and turned over something of a new leaf.

Wong's goal was always to teach Chan Sen.
What better way to end Xu Li's reign than to persuade those who would pass on his teachings to pass on yours instead?
 * This is almost certainly what's going on, though the details may be different. After all, he does tell Chan Sen that Liu Wong can help him surpass his master.