I'm going to second Mark's point about the State employees not knowing all the procedures. I asked at the clerk's office while renewing some other vehicles and they gave me a flat "No, can't be done." One night, unable to sleep I started poking around on the KY Transportation cabinet website and found out there is a "classsic title" available for vehicles with no paperwork being restored.
Took my Lammy to the nearest inspection station with my affidavit (notarized letter) showing the pertinent info and they gave me a "request for title" form. Went to the same clerk's office with my officially stamped form from the sheriff and, after consulting a binder, consulting a supervisor, consulting some more binders in a locked cabinet, photocopying the instructions and putting them in the appropriate spot in the first binder, my request was sent off to Frankfort and I got my title in the mail a few weeks later.
There was still some element of luck involved, it seems the inspection station near me is the only one aware of the classic title. A friend of mine got nowhere at the station where his cousin's inlaw worked, but did get his request for title when he went to my station.
In summation, it varies by state, do your own research, and don't believe absolutely all my friends when they say you have to go through Vermont. (The same friends who told me not to buy that '70 Ducati scrambler. >:-( )