Islam started with the rulers being the head of the church.

Again, there's no church in Islam. The ruler has no authority to actually make religious decision. Islam doesn't have a Pope.

Most of Islamic traditions in the Hadith is traced back (with very little supporting evidence) to the original founders.

Okay I'm not sure what you mean by "with very little supporting evidence". There's a whole branch of Islamic scholarship solely concerned with narrators and their reliability, and a lot of Hadith was written down before Muhammed's death and during the time of his companions. Hadith was compiled 1-2 centuries after Muhammed's death, but that compiling wasn't writing down oral tradition, as most (or at least a lot of, my knowledge of the specifics is fuzzy) Hadith was written by that point. What happened in that time period was scholars journeying all over the Caliphate and gathering Hadith that was already preserved and written down.

who totally were not fully funded and directed in any way by the rulers.

I mean yes exactly. This isn't myth; these were real things that were done and written down by real people. If they were directed by the rulers someone would've written that down.

These laws amazingly create social classes of elites and everyone else.

Okay you'll need to provide examples because I'm not aware of a single law that does what you're talking about.