As long as he said it was non-transferable it will still be associated with the car it was issued to, i.e. the car you just bought. The DMV person has identified the obstacle to registration as transferability, so you should take him at his word and point out that you are not transferring 'it'. 'It' already exists and is associated with your vehicle.
The SB100 process will result in a state of CA SB100 tag being affixed to your car that looks like this:
Give the sequence number off the tag on your car to the DMV rep and they should be able to finish the job.
If your car does not have the BAR SB100 tag affixed to it then it is not SB100 registered and you get to do the SB100 registration work yourself.