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The paint is already in rough shape over the HIN so I'd strip it off to confirm. I'm willing to bet that D is really a C once the paint is gone. If that's the case, you'll probably need to take a pencil etching of the HIN to your DMV to have the title corrected. It may also require a visual inspection by them to verify.
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Since the D makes no sense and a C does I think the mystery is solved