My recent conversations with DMV employees here in California has also indicated that after about 10 years of non-registration a vehicle gets deleted from their files. To re-register I've been told to bring the bike down there so that they can verify the frame number and then issue a new title and registration. They assured me that there wouldn't be any penalities; just standard fees for title, plates, registration. I'm guessing I'll get out of there for less than $150.
If your bike has expired tags but is still in their computer without a non-op on file, yeah, you're going to pay some penalties. However, $800 sounds ridiculous. I've paid penalties on cars in the past that hadn't been registered in a few years, and seem to remember paying about $100 in penalties. An old motorcycle would be even less I would think.
However, my information is about as worthless as anyone else's since we're all just guessing. Call the DMV!
