The raid is not in doubt. What the eleventh-century record will support about its scale is a much narrower thing than the story that later grew around it.
The Ghaznavid side
Al-Biruni, the Khwarazmian scholar who was at Mahmud's court and who had no reason to understate his patron, records the raid and the breaking of the linga. He is the closest thing to a contemporary witness the episode has. Later Turko-Persian chronicles, written to praise Mahmud as a breaker of idols, enlarge the account steadily. The treasure grows, the temple grows, and the resistance grows with them, because a larger prize makes a larger conqueror.
The Gujarat side
Sanskrit and Jain inscriptional material from Saurashtra in the decades after 1026 is close to silent about the raid. Local records show repair work under way within a dozen years or so and the site functioning as a pilgrimage centre again by the 1030s. Merchant and pilgrim traffic through the port continued.
Reading the two together
Romila Thapar's Somanatha: The Many Voices of a History sets these bodies of evidence side by side and observes that they do not describe the same event. Neither body is disinterested. The court chronicle inflates because inflation is the point of the genre; the local record is quiet partly because inscriptions were cut to record endowments rather than disasters.
What survives the comparison is a raid in 1026 that took a great deal of portable wealth, damaged the shrine, and did not end the life of the place.