Mac,
That is not surprising, in fact you had better have a good VIN and title lined up before building something like this. You can't imagine the additional rules you have to comply with in a lot of states if you put this together as an "assembled" car! In a lot of states, you have to comply with all smog rules pertaining to the engine that you use! Could you imagine building a C1 with all the current smog equipment! There are many places that you can get clean titles for such cars, and the streetrodders have been using them for years. For many years, it was not required for titles to be returned to the state when a car was scrapped, so there are lots and lots of titles floating around out there waiting for such a car.
This type of car construction is done every day, and is the norm in some states. In Calif., the state limits the totaled "assembled " cars to no more than 5000 annually. As one could imagine, 5000 does not even begin to supply the demand for the streetrods alone, so people will "wash" an original tilte in another state and title a fiberglass bodied, custom frame hot rod as a 32 ford. It blew up on a bunch of guys in Ca last year when the state came down on them. A bunch of rod builders. including Boyd Coddington, were charged with evading taxes on these cars! Notice thay I said EVADING TAXES! That was all the state was concerned with, not the fact that cars were titled as original cars, without one single original part on them. It seems that these builders had been claiming values that were only a small percentage of the true value of the finished car, and the state was losing millions in revenue. They actually go to shows and rod runs, trying to identify tax cheats! As long as you are not trying to "clean" a stolen car, you really have nothing to worry about.
Regards, John McGraw