Yes, far from history. I heard a talk given by a former Middle East diplomat and historian who had tried to retrace Lawrence's claimed exploits in The Seven Pillars of Wisdom. He stated that it was probable that, while possibly not a complete fantasist, T E Lawrence certainly embroided the truth.
However, since Lawrence of Arabia was scripted by Robert Bolt, based on Lawrence's own writings, and essentially a British film directed by David Lean it may be a little unfair to call it Hollywoodised twaddle.