
From reading this thread through, I would only add two points...
Firstly, it appears, if this dog was "given" to the person who then passed it on for cash to the OP, then the original purchaser of the puppy from the breeder is neither of the previous owners - unless the pup was given for free which is highly unlikely especially if KC registered.
Re getting microchip details changed - why not just get the dog microchipped again? This might sound very simplistic, but would it be feasable, or cause too much confusion? I would think that the current chip could be cancelled if not able to be updated.
I agree that registration is not especially important if the dog is going to be purely a pet. If he was going to be used for breeding then all I can say is there are far too many unregistered litters out there already...!