Marx's writings imagine the dictatorship of the proletariat as a transitional phase before the state would wither away and a pure communist society would emerge. Without getting into any debates as to whether the Soviet Union actually was a socialist society or not, it's propaganda certainly thought it was.
However, if the dictatorship of the proletariat is merely a transitional period, how was this reflected in Soviet propaganda if it was at all? I suppose this question would also apply to other Marxist-Leninist states as well, so feel free to post any information on those. It would seem to undermine the near-deistic powers ascribed to the leaders of those states if they were considered transitional, and yet even a cursory familiarity with Marx would force someone to recognise that this is exactly what Marx was saying. How, if at all, did Soviet propagandists reconcile this dilemma?
Marx's writings imagine the dictatorship of the proletariat as a transitional phase before the state would wither away and a pure communist society would emerge.
Marx did predict the state would "wither away" but the transitional phase part is from the very end of «the history of the family...» by Frederick Engels. It was greatly expanded upon by Vladimir Lenin in «the State and Revolution». If you're interested in the formal raison d'être of such states as the People's Republic of China or the Socialist Republic of Vietnam this is where you can get your details.
Did Soviet propaganda acknowledge that the Soviet Union was supposed to be a "transitional" stage to full communism?
Yes. Example: A poster from 1980 saying that "the current generation will live to see communism".
However, if the dictatorship of the proletariat is merely a transitional period, how was this reflected in Soviet propaganda if it was at all?
The "Dictatorship of the Proletariate" Lenin defines, in the spirit of Clausewitz, as "the extension of class warfare with different means". That is the transitional peroid when the bureaucracy and the army that was previously used to "suppress the working class" would be lifted against all the "reactionary" "counter-revolutionary" groups. To a Bolshevik US America, for instance, was still a "dictatorship of the bourgeoisie".
This Lenin passage is quoted from a speech of Lenin's to the IIIrd Internationale in a Soviet citations book for party members that I'm holding in my hands right now. Mine only includes the sayings of Marx, of Engels and of Lenin because it was printed after the Destalinisation. A similar citations book from China might include the sayings of Mao and Stalin and even some of their latter day saints.
Propaganda is a very narrow and a very difficult term. In the everyday context it's the posters like the one you see above. For a Russian Marxist propaganda was defined by Plekhanov as spreading complicated ideas to an educated public. The rabble-rousing counterpart to him was "agitation". It's counter-intuitive to modern English speakers.
So let us stick, more, broadly, to the arts: If you studied any of the liberal arts in the Soviet Union in the post-Stalin era USSR (intending to become a scriptwriter or, say, a censor) the one big theory you absolutely had to be versed at was «Socialist Realism». This notion was pioneered by Lunacharsky in 1932. After the anti-Formalist campaign of 1948 it became the sole aesthetic theory left of the USSR.
The idea is you work in the same fashion as Bourgeois Realists (writers such as Thomas Mann, Leo Tolstoy or Theodore Dreiser; painters such as Hubert von Herkomer, Vladimir Makovsky or Gustave Courbet) but your protagonists are not the Bourgeois families like the Buddenbrooks of Mann but Proletarians like the Kochargins of Ostrovskiy. Commonly the protagonist of a Social Realist novel would get increasingly conscious about how society works and about his own interests therein and he would join the communist party either to work in the underground (if it was set in the pre-revolutionary era or outside of the USSR) or to take a more active stance in socialist construction - abandoning their previous small-minded egotism.
In my Uni young people from China have told me they still would have to study Socialist Realist literature from the Stalin era. They had to read "how the steel was tempered" and "the silent don". In Russia the stress on socialist realism would largely vane. After Khrushchev you primarily read Gogol, War and Peace and the other classics. And you would get many kinds of stories, like, for instance, a very frank portrayal of the hypocrisy and decadence in the party youth organisation (Aksyonov's «Oranges from Morocco», 1963) or, say, a condemnation of the Stalin era (Solzhenitsyn's «One Day in the Life of Ivan Denisovich», 1962). On the telly you would get ordinary love stories (i.e. not just between the working class and the party. See «Moscow does not believe in Tears», 1979) and in the theatres there'd be ordinary comedies, ordinary Chekhov-like realism (plays of Nikolay Kolyada), musicals fashioned after Andrew Lloyd Weber (Voznesenkiy's «Juno and Avos») and allegorical plays like, for example, those of Evgeny Shvarts.
