If that guy really does have a title for it in his possesion, he
could say that you stole it from him.

As for getting any old title, you could just go to the court house & apply for a home-made title. Tell them that you built the boat yourself & you want to legalize it for use use in public waters. They should be able to help you through the process. I'm unsure of what it costs to do this, but it wouldn't hurt to look into it. Especially if there are no numbers currently on the boat, that means that the previous owner never legalized it, so it shouldn't show up in the system.
As for that guy, it's ashame that people are like that. I hate people like him.

It's unbelieveable what people try to pull over your head now-a-days. Thats awful.

Good luck with the boat & keep us informed on what you decide to do &/or what happens.