The video billboard, which also had the message "Impeach Obama," was taken down Tuesday, WANE-TV, Fort Wayne, Ind., reported. The billboard was erected by LarouchePAC, a group affiliated with the controversial political activist Lyndon Larouche.
Kendallville is a city of fewer than 10,000 people in northeast Indiana. Mayor Suzanne Handshoe said her office received many complaints about the sign.
"All the hard work that we put forward as a community to change our image, to be a positive, growing community, and then a sign like this appears. It just undoes everything we've been doing," she said.
The doctored photo of Obama with the mustache -- which Hitler, according to one story, copied from the actor Charlie Chaplin -- has been a staple for Larouche's followers since Obama's 2008 election. The Wikipedia entry on the Worldwide Larouche Youth Movement shows members carrying posters with the photo in Seattle in 2009.
A LarouchePAC spokesman said members were in Kendallville during the weekend, handing out flyers.
"There to stir the pot and let people know that there's a political fight that's going on, that's going on in D.C. and extends out to the regions of the country," Bill Roberts said.
Kendallville officials said the video billboard was taken down because it had been up longer than it was contracted for.