I read that Kashiram experienced financial hardship. Was this a punishment from Sai Baba for some mistake?

The financial hardship Kashiram experienced was not a punishment but a compassionate act of spiritual purification by Sai Baba. As described in Chapter 0, Kashiram had developed pride in his charity, feeling upset on days Maharaj didn't take Dakshina from him. The text states that 'such feeling bad is an obstacle to spiritual progress, because pride creeps in.' To remove this obstacle, Maharaj started a 'barrage of demanding Dakshina' even when Kashiram's funds were depleted, forcing him to borrow. This whole Leela was designed to make him understand that he didn't truly have the power to give. Once his ego was dissolved, his prosperity was restored, demonstrating it was a lesson in humility.