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The GDR knew it was collapsing. Hungary knew it was collapsing, Czechoslovakia knew it was collapsing. Poland did not understand it was collapsing and regardless of the Gdansk protests would have toppled soon anyway. Polish communists were never successful for instance in stamping out Catholicism. In the case of Romania, Ceaucescu was even more extreme than the Soviets. He relocated the rural population into cities, outlawed birth control and did a better job than the Soviets at managing the economy. In the Balkans; Bulgaria, Albania and Yugoslavia were treated as strange cousins and since their economies were so non-industrial to begin with, the Soviets for the most part left them alone.
But it's telling that up until the end of the CCCP, the West ALWAYS got it wrong. They always believed that the CCCP was in better shape than it was. During the Kennedy administration the CIA estimated that the Soviet economy was 50% larger than it was and was growing twice as fast as the American economy. Even in the late 1960's official papers predicted that the CCCP would surpass the US economically as soon as 1989.
But in reality the Soviet economy it turns out was never more than 50% the size of the US economy and from the late 1950's onward never grew at more than 1% per year and often went negative. They made the classic Keynesian choice of guns or butter and chose guns.
So no, not everything we knew about Communism was wrong. In fact most of it was right. The problem was there's always been a persistent bunch of fools on both the left and the right who insisted on calling it Communism. It wasn't. It was just another variation of top down corruption and failure