Well, I have used the Indian Railways for transporting the bike a few times. There are a few things that you need to consider before you take on that adventure:
Firstyl, yes, most of the horror stories that you have heard are probably true (misplacing vehicles, only to find them at another station/ dumping other cargo on top /damages).
You need to make sure that there are direct trains between stations you want to transport otherwise it will just add point where things can go wrong while loading and unloading and even misplacing it (yes, it still is a common occurance).
While transporting your bike, it is you and you alone who is responsible for packaging and proofing your bike so use as much bubble wrap and other packaging material to ensure safety.
You need to time booking of cargo so that you can ensure your presence at the platform when the vehicle is being loaded so that you know where its kept and in what condition (you may need to bribe a little here).
Yes, fuel tank should be empty.
Remember to get transport insurance (available at the time of booking).
Collect the bike as soon as possible at the destination station or be there when it's being unloaded (just to add a safeguard).
Before collecting the bike, remember your bike does not have fuel, arrange for it. Remove all packaging before signing anything off so that you can apply for a claim in case of damages.
Thank the gods for receiving it without any damage (if you are lucky). It is a task to get your beloved bike transported through railways and hence, I have started riding it myself to the destination no matter the distances. Although I can understand why you would want to transport yours, remember there are risks attached to it, some may be mitigated but for others, you will have to assess if you are willing to take such risks.
You may chose to take bike transport cage or packaging (wood containers) as mentioned in the blog attached above.
