It started before the students took over the embassy. It started when Carter undercut the Shah and let the mullahs take over. Modern Islamic radicalism really got rolling big from that point.
Yes. I just finished the research for my biography of Ronald Reagan (due out next year) on the 1980 campaign. What stood out to me was how incredibly consistent the CIA was in being WRONG.
They were wrong about the USSR’s economic power; they were wrong about the Sandinistas in Nicaragua; they were wrong about Cubans in Grenada; they were wrong about the “students” working for the Ayatollah and about undercutting the Shah; they were wrong about the Mayaguez, then about where the crew was during the rescue.
In short, I cannot find one major issue in the 1970s where the CIA was correct in its general assessment of the situation or in its recommendations for action (or inaction).