I never read (or don't remember the details) of the bike being stolen, but from where I sit, here is my suggestion. If bike was titled in your name, you are the owner. Go take it for a ride and don't come back. If that's not an option, look at it, VERIFY its is 100% your old bike, and do 1 of two things
1st, call cops and let them know it is it. You have the title and the vins match and get them there ASAP.
2nd - its a long shot, but tell the seller its your old bike that was stolen. Sounds like he didn't steal it. Tell him to hand it over and that is the end of it, or cops will be there quick because you have a friend who is eye shot away waiting for a signal to call or not. Guy probably knows its stolen and doesn't want issues with police.