If you can still participate in battles at Bugsy's Gym, that means you must not have beaten it yet, so not only can you obviously not get to Kanto which is where Houndour's exclusive habitat is, you can't even get through Ilex Forest to reach route 34 and the day care to get eggs. The fact that you have a Houndour that early in the game, then, clearly means you had to trade it into that Crystal file from some other game, and the OT is thus registered as that other game.
Prior to getting your second badge, the obedience cap for outsiders is only level 10, not even enough to be on even footing with Bugsy if you insist on trying to battle the Gym with Houndour. Once you do get through it, the cap increases to 30, and isn't likely to be an issue for the rest of the game.
