I heard that there were some P229s floating around with M11 markings, and the .mil had accepted them as M11s.  Is this true?

I haven't heard that and highly doubt it. As far as i know yes all M11's are Sig P228's. I know the Sig P229 is more popular with civilians since it's harder for them to get the P228 since Sig has to fulfill their military contract.

Yes, the M11 is a Sig P228; usually carried by some Naval Aviators, Military Policemen on PSD detail (carried one myself) and CID agents.

The Sig 228 and 229 frame is the same, so there may be some CPO guns with the M11 markings and a 229 slide. I have never seen one but the possibility exists.

Recently there was a release of 2 new P228 lines, the P228 SAS and the P228R. These are commonly referred to as "frankenguns" on some other forums because they seem to be pieced together using various parts that Exter had on hand. The P228Rs were all built on P229R frames but some of the guns have the M11 and US markings (etched out but still visible) and some don't. Some have night sights and some don't. Some have the short trigger and some have both the short trigger and the SRT package installed. Mine has the markings, regular sights and it came with the regular trigger installed. Mine (as with all P228Rs AFAIK) have "Made in Germany" on the slide, frame and barrel but they were assembled in Exter because they are not triple serial numbered and do not have the proof marks, both of which would be required for export as a full gun from Germany. The P228Rs were rumored to be an overstock from a production run of M11s but I have not heard of one person who has ever seen a railed M11 in service with the military.

The P228 SAS was a P228 slide on a P229 SAS frame. I don't know about all the different parts from there but I believe that they were also German frames, barrels and slides but assembled in Exter like the P228R.

The P228 slide has only ever been made in Germany.


ETA- All of that may have been a lot more information than you wanted. But there are some frames in circulation that have the U.S. and M11 markings on them although the current ones have been etched over. The markings are still quite visible though even through the etching. So the possibility exists that you would find a P229 (though probably not new stock from Sig) that had the markings on it as well.  

Most of the M11 pistols that CID uses are the Model P228 with standard frame, however there are some of the newer stamped slide and railed frame M11 pistols in circulation. The M11 in general is not found everywhere and some of the newer railed frames marked M11 should be expected.  When authorized or requested I do not know any way to get one vs the other.  The USCG carries P229R pistols in .40 and the ones I looked at do not carry M11 markings.

Here is my M11

Not a great photo, but here's my P228R (M11) with the markings etched over.  They are actually visible close-up.  On top is a P226 NAVY.