The original mudmen are from Komunive, Asaro in the Eastern Highlands province of Papua New Guinea. One of the original mudmen was Ruipo Okoroho. Be warned that there are imitators, some travel agents even claim to have mudmen from Mout Hagen!
The legend that surrounds the reason the mudmen appear the way they are is that they were defeated by an opposing tribe and forced to flee into the Asaro River. They waited until dusk before attempting to escape. Arising from the muddy banks, the enemy saw them covered in mud and thought they were spirits / ghosts.