I'm not an attorney, but the first question I'd ask is whether you need to match his signature in order to properly ID him. A person's signature is whatever he or she wants it to be - look at the undecipherable scrawl so many people use to sign documents.
That said, this guy is apparently not too bright - he was supposed to sign it and add "without prejudice", not sign it just using those words. I think what you've got is a driver's license that wasn't actually signed, but that's just personal opinion...
If the DMV doesn't care, CA notary law doesn't require that you match a signature on the ID, and all other required elements are present, is there really a problem? Do CA notaries have the authority to add ID requirements beyond what state notary law requires? Here in NY we are only required to be "reasonably certain" of ID, which leaves us a lot of wiggle room - do you have that option?
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