There are multiple points here :
1. When some Kashmiri leftists named the Lal Chowk as that, I believe before the Partition, I don't think there were Hindus, Sikhs and certainly no Buddhists among these leftists. That set an early community separation.
2. I quote
this Wikipedia page :
This knowledge surely would have left some bad taste among modern Kashmiri Muslims and utilized by the leaders of the current separatists.
3. More than one Hindi films were shot in Kashmir before the 1980s. I don't think the film crews faced problems there while shooting based on being non-Muslim. But there certainly was an undercurrent of socio-economic deprivation. Read
this piece by the actor Parikshit Sahni who was recalling an incident with his father Balraj Sahni in Kashmir :
4. Beginning the 80s the Indian State focused on suppressing the Kashmiri Muslims so those Muslims gathered around and did a closing-of-ranks of the two identities they had : Kashmiri and Muslim.
5. In the last 15 to 20 years the Indian State did not bother to take action against the regressive social elements among the Kashmiri Muslims like Asiya Andrabi and instead concentrated on only the political aspect - separatism. This allowed the regressives to increase in influence, so there happened incidents like some Kashmiri mullahs passing fatwa against the first Kashmiri all-female music band Pragaash and the followers of those mullahs sending out death and rape threats to the three woman members of that band.
All in all, religion is just a manifestation and identity behind a feeling of being repressed by the State. There are no Hindus, even the Hindutvadis, being repressed by the State in J&K or in other parts of the country so the Hindus have nothing to complain.
Not so. I quote
this thread OP which is an article by an American reporter Dexter Filkins :