You can raise your reputation quickly by donating at temples.

Well, I did that. Why would people hate me for that?

Because he's part of the temple of Baa and those are the bad guys.

The money you gained for candelabra should be more than sufficient for donating to get your reputation up again. It's worth it, reputation does affect buying and selling prices IIRC.
PS: If you donate in a temple of Baa your reputation will go down.

I read that in the prima strategy guide, but even with Greyface's patch it doesn't seem to do much. Is there a patch that fixes this?

I think reputation only goes up / down on region basis. So you'll have to donate in the Temple in NS, if they hate you there.

Not in Might and Magic VI. Reputation affects the whole gameworld; it doesn't get region-based until For Blood and Honor

'm loosing my touch then. Time for my annual M&M Summer Run(c) during holidays, I guess ;)

Same here. I've been diligently advancing my characters in the original Might and Magic, and it's taken me quite a while to get to level 7! I don't know how some of these people are doing it so quickly.

The 3DO games are so relaxing, by contrast. And being able to save anytime doesn't hurt XD.

There are a few tricks to leveling faster, once you find them, but yeah, generally it's a lot tougher than the later games.