After reading through tons of articles and theories; here's what I think happened.

While experimenting with a small amount element 115, Dr. Maxis and his partners Dr. Edward Advar and Richtofen discovered nazi zombies. I think this because element 115 is radio activate, there for causing the mutation from humans to zombies. Now you mgiht be asking, well how come the Wunderwaffe, powered by element 115, which kills the zombies, can also make them? My thought is a small dose of the element causes the mutation, but a large dose delivered by the Wunderwaffe kills them.

After discovering this, Dr. Maxis got the idea to create more and control a nazi army of the living dead. He began to make more and more until he had an enourmous amount, along with his friend Peter developing Imperial zombies at Shi No Numa. He also wanted to try testing them on the teleportation devices he was developing at the time. The teleportation devices would always fail and the zombies would either go beserk or just mysteriously disappear.

Dr. Richtofen has been believed to be the one who killed Dr. Maxis, but I think that Richtofen had been working on the Wunderwaffe and was sent to Shi No Numa to continue his project there where he could have a supply on element 115 from the meteorite, and all the Imperial zombies that he could test it on.

Now onto Hellhounds, which in my opinion have already been explained. Dr. Maxis and Advar used Samantha's pet dog, Fluffy, in the teleporters. When they began the test, Fluffy was transported and disappeared just like the zombies. Except this time, Fluffy reappeared from the bolt of electricy as a Hellhound. At that time Dr. Advar, who was annoyed and jealous of Dr. Maxis, locked him and his daughter Samantha in the room with Fluffy the Hellhound which killed them.