Trode Khangsar is Offered to Dorje Shugden by the Fifth Dalai Lama
As a result of the incarnate master Tulku Dragpa Gyaltsen being killed, there were many ill omens and strange occurrences in Lhasa that year which even affected the Dalai Lama himself according to his autobiography (ESG, 119). At first the Dalai Lama sought to subdue the effects by inviting masters to subdue Dorje Shugden through wrathful rituals, but this was ultimately not successful.
As for the final events that led up to his reconciliation of the events regarding Tulku Dragpa Gyaltsen and his recognition of Dorje Shugden as a protector, Kangyur Rinpoche gives the following account (TSH, 32-34):
The Fifth Dalai was on retreat in the Potala when the Potala began to shake. When the Potala began to shake Dorje Shugden had his right foot pressing on the top of the “mi drug” boulder mountain [smi drug rdza ri] and his left foot pressing on the top of Drepung Gepel mountain. His pressed down on the Potala with his trident... The Fifth Dalai Lama felt remorseful and confessed to Dorje Shugden. He founded Trode Khangsar in which he placed a statue of Dorje Shugden. He then wrote Manjushri’s Own Words [a famous Lam-Rim text], and offered it to Panchen Rinpoche who was almost 100 years old. Panchen Rinpoche said, “I am a happy old monk, now by this the Gelug tradition will flourish” and he passed away soon after.
This account of how the Fifth Dalai Lama acquiesced to Dorje Shugden through a vision again may be difficult to accept as historical. As shown with the institutionalization of the various protectors, both secular and mystic affairs are difficult to separate from the accounts of the Fifth Dalai Lama’s life.19 The nature of his retreat at this time was on visionary rituals. In his autobiography, it is well documented that he regularly consulted with the state oracle, Nechung, on the important matters regarding the state.
As for how the Fifth Dalai Lama initially designated Trode Khangsar to Dorje Shugden, there is this historical account from Choepal’s pilgrimage guide (GCJ, 33):
As for the tsen khang, the Fifth Dalai Lama offered it as an abode [gnas] to Dorje Shugden. Originally, because this place had a “picnic house” [spro khang] that belonged to the Fifth Dalai Lama, it came to be called Trode Khangsar. Initially this tsen khang had statues of Dorje Shugden and Setrap and was also used for invocations. Later Desi Sangye Gyatso, because he earlier lived at Riwo Choling monastery, entrusted ownership of the tsen khang to Riwo Choling. By this Riwo Choling was required to send 11 monks and an oracle to permanently stay in Trode Khangsar.
Thus, the official establishment of Dorje Shugden begins with the Fifth Dalai Lama and is further culminated through Sangye Gyatso who ruled Tibet (as sde srid) before and after the Fifth Dalai Lama’s demise. Although Desi Sangye Gyatso is very famous and well known, there is very little translated into English about his eventful life. A glimpse into his life and education is required to fully understand the implications of the entrustment of Trode Khangsar to Riwo Choling monastery.
19 The Fifth Dalai Lama has an entire volume of experiences from retreats called a secret biography in which various visions of his are described. This has been translated into English as Visions of the Fifth Dalai Lama. Not only that, there is an entire tradition of teachings, called pure vision (dag snang), for meditation practices passed down since this time that are based on the visions of the Fifth Dalai Lama as well.