I think your theory just might be right, Vandoo!
It's similar to Yixing teapots, of which I have a couple. But this one is much much larger and the surface texture is like cement. It would make a very poor teapot as it'd be very difficult to the tea leaves out.
http://en.wikipedia.org/wiki/Yixing_clay_teapot
If it is from Yixing, why would it have Mongolian writing on it? Since the writing is nonsense maybe it was purely decorational. The writing is "correctly" formed but it doesn't mean anything, at least not in Mongolian. The Manchu/Jurchen used to use the same writing system but that was hundreds of years ago.