Peace on Earth...
Is is true that the phrase, "peace on earth, good will toward men," is not an accurate translation, and that instead it should be, "peace on earth to men of good will?"  

Re: Luke 2:14b.  To give you a global answer, "Yes," your latest information ... that is, the information you gave me re: this part of verse 14 is correct ... at least to an extent.

Now for something of a brief (though you may wonder at this word!) academic answer to your question.  The Greek text, which I do not have the capability of displaying in this response, is, quite literally:  "...and upon earth peace in (or, "among") men (or "people") pleasing (or "goodwill".)  Of course that is far from an English translation that is accurate and acceptable.  So, let me break it down a little... (click HERE to continue)

The translational problem seems to be with "what to do with the last word in the sentence?"  The word ... transliterated, is "eudokias" ... pronounced with a vocal accent over the letter "i."  This word, that is a noun, is prefaced by another noun, "men" or "people" which in turn is prefaced by the preposition "in."  The word for "men" or "people" is plural, and in such a context the preposition "in" is best rendered by the English word "among."  So, we are dealing with "peace" that is characteristic of a group of people. 

Now, the problem lies in how to best translated "eudokias" in the context of the syntax presented by Dr. Luke.  This noun acts adjectivally in the context of the syntax.  In otherwords, it characterizes the "people."  It is this modification that has caused Biblical scholars and translators to struggle with an acceptable English translation that accurately states what the Greek text connotes.  The noun "people" is in the dative case as the object of the preposition "in."  That is basic Greek grammar.  But the noun "eudokias" -- "goodwill," or "favor" is in the genitive case.  This noun is anarthrous, that is, it is not preceded by the definite article.  An anarthrous noun as an object of a preposition is sometimes qualitative, as I believe it to be in this instance.  Therefore, I am persuaded that "eudokias," morphologically a genitive anarthrous noun, is qualitative and in this sense is a modifier of "people." 

That being stated, the question lingers: "How do I translate it qualitatively?"  A part of the answer lies in the preposition "in" which is accurately rendered "among" when used here with the plural noun "people."  Therefore, "peace" is a characteristic of a group of people ... namely, those who believe in, trust, rely upon, have faith in, and walk obediently with God.  They are those upon whom God's favor rests.  They are people with whom He is well-pleased. 

Therefore, in the light of the morphological, lexical, and syntactical considerations, I suggest that this part of verse 14 read: "...and peace on earth among people on whom His favor rests" or, "...and peace on earth among people with whom He is well-pleased."  The translations: "goodwill toward men" and "to men of good will" fall quite short of an accurate hermeneutic applicable to this text.  While the "of good will" is a simplistic translation of the genitive case of, "eudokias," the context leans heavily toward the translations I have suggested.  I trust this "global" and somewhat "academic" response to your question will help.