I know that the Ogre scene creator/editor Artifex Terra uses terrain decals for the terrain tools.
Artifex Terra uses the Editable Terrain Manager (ETM), which is also available for an older Mogre version.
So you can search inside of the sources of Artifex Terra or ETM to find the related code. (I suppose this is time consuming.) http://www.ogre3d.org/tikiwiki/Artifex+Terra http://www.ogre3d.org/tikiwiki/ETM
Additionally you can search/ask in the Ogre main forum and try to port the related C++ Ogre code to C# Mogre code.