Was all the עבודת הקרבנות done in the first Beis Hamikdash invalid?

Yesterdays daf (זבחים ס"א) seems to imply that was the case. The Gemara says that the mizbeach in the first beis hamikdash was 28x28 amos and in the second bees hamikdash was 32x32 amos. Rabin explains the difference as follows:

In the first Mikdash, Nesachim would flow into Shisim (a pit south-west of the Mizbe'ach) down the wall of the mizbeach. They enlarged the Mizbe'ach in order that the Shisim would be within (under) the Mizbe'ach and they made the corners of the mizbeach hollow so that they could pour nesachim in them. At first (during the first Beis Hmikdash), they learned from the words "Mizbe'ach Adamah" that the mizbeach has to be completely solid. In the second beis Hamikdash they thought that drinking ('consumption' of libations) should be like eating (Korbanos that are burned, i.e. within the boundaries of the Mizbe'ach) and therefore made the holes to pour the Nesachim as part of the mizbeach. Therefore, they understood that Mizbe'ach Adamah" teaches that the Mizbe'ach cannot be built over domes or tunnels (that are not needed for the Mizbe'ach).

What comes out is that according to the way they understood pesukim and halacha, the way they did Nesachim in the first beis hamikdash was pasul.

 This ties in to the general dispute about what was received at Sinai and if there is one halachic truth.