sstcobra,
Yes, I had this same issue with the 230sl I just sold. The fix was time consuming but fairly straightforward, at least here in Georgia. The seller just needs to get a form from DMV and take the car to a police station. Then have a police officer fill in and attest to the correct VIN. Seller submits the form to DMV and they reissue a corrected title. Total time for me was 2 weeks.
Best,
g