Well it's been confirmed in several interviews with Boon and Tobias. MK1 was a combination of Big Trouble in Little China, Enter the Dragon and those old 70's chop-suey films. They wanted Van Damme to be the main character in the game but it fell through, so they added a Brue Lee clone to the game. This is why Johnny Cage (the Van Damme character) was on the side of the MK1 cab even though Liu Kang is the main hero in the series..... until MKII he wasn't. This is also why Cage has always been portrayed as sort of a ---meecrob--- in his endings.... Van Damme wanted too much money so they poke fun at him. Ironically he later stars in Street Fighter, the movie, the game... which is just awful.
Kano's inspiration should be obvious. Sonya was put in at the last minute because the Midway brass said there should be a female character... she's partially inspired by Sharon Stone in Total Recall. But yeah Raiden, Shang Tsung and a few others were straight from BTILC.