The issue is that there is an international convention regarding the 17 digit VINs found on all vehicles beginning with the 1981 model year. Among other things, the convention required the use of capital letters and numbers only, eliminating the use of special characters and also the letters "I" and "O," as the numbers "1" and "0" are too similar in appearance. VINs prior to the 1980 model year did not have conform to any specific standards and could be any number and sequence of letters, numbers and special characters that each individual manufacturer chose for their own records. I have pre and post war vehicles with serial numbers that range from six to sixteen digits.
The Daimler Benz serial number convention for vehicles produced in the era in which our Pagodas were manufactured specified a 16 digit sequence of 14 numbers separated at specific intervals by two dashes, in which the first six digit string and the dash-separated second two digit string describe the chassis, engine, transmission and right or left-hand steering, while the dash-separated third six digit string is the chassis number. Example: 113043-12-012345 It sounds like the VIN on your California title does not conform to this convention.
Because the 17 digit VIN convention has been in effect for decades now, DMV, dealership and even insurance company computer software contains an algorithm based on a "check digit" in the 10th place of the 17 digit string that can verify correct VINs. If a DMV operator makes a keypunch error the VIN will be rejected, which is supposed to prevent entering improper information into the DMV database. When a title is presented with more or fewer than 17 digits, or the 17 digit is "invalid" because of a prior keypunch error that causes a validation conflict with the "check digit" in the 10th place of the 17 digit string, a supervisor over-ride is necessary to process the DMV transaction. Most supervisors may only be authorized to perform an override if they can verify that the information that the operator is trying to enter is consistent with the official title being presented, but they don't have the authority to correct the information presented. Others may have to verify the information is consistent with the VIN on the vehicle. Most likely they may also have to file a report to document each and every such over-ride. In some states, supervisor over-rides are no longer authorized, and such cases are "kicked upstairs" for action. It sounds like NC only authorizes over-rides if DMV can be held harmless through the posting of a bond.
This is not surprising in that once upon a time there were places in NC that were a hot bed of odometer rollbacks, chassis number modifications and other used car/stolen car shenanigans.
Let me preface the following by acknowledging that the rules pertaining to correcting VIN errors in NC today may likely be different from what I have experienced in VA on two different occasions in VA roughly 30 years ago.
In both cases I was able to speak with the General Manager of my local DMV office, who summoned a State Police officer. The two of them together viewed the correct VIN as found stamped on a frame rail, vin plate, or (in the case of a 1934 M.G.) bonnet hinge. What they were looking for was evidence of the same sequence in two places on the vehicle. They jointly signed an affidavit verifying their findings. The affidavit was forwarded by the local DMV office GM to VA DMV headquarters in Richmond, along with the title provided by the seller and my application for new title and Antique Vehicle registration. After review, the correct VIN sequence was eventually approved to be entered into VA DMV records. It seemed like forever at the time, but in each case I think it may have taken a month or so for my new title and plates to arrive direct from Richmond.
I must say that both of these experiences have caused me to be hyper vigilant about scrutinizing and comparing VINs on both the title and the car over the years. The only time since then that I found a VIN discrepancy I refused to continue with the purchase until the seller was able to present a corrected title. It really should not be up to the buyer to correct such discrepancies (even if the buyer might be more knowledgeable about the nature of the discrepancy). Believe me, a motivated seller will get it handled!
One should also be wary of situations in which the seller wants to convey a title reassigned multiple times by individuals as the vehicle was passed on to subsequent buyers by sellers unwilling to go to the trouble and/or expense of obtaining title in their own names before reselling the vehicle. If obtaining a vehicle from a private party you want to be presented with a clear title in the name of the individual from whom you are purchasing the vehicle. Only a licensed dealer is authorized to reassign a title to a third party.
Now I'm going to ask a question: Were you the owner of your California titled and registered 230SL when you were a California resident and have now moved to NC, or are you a NC resident who has newly acquired your 230SL from a California resident?