I have a similar issue with some SDE Feature classes in ArcGIS 10.1. How does one fix incorrect projection metadata?
You can't "fix" metadata in situ -- you need to drop the table, correct the root problem in the source data, then recreate the feature class (with the correct parameters). As with the previous poster, you'd need to provide detailed information about the data in order to get further assistance:
Thanks Vince. I figured out that it was the ArcGIS 10.1 SP1 Quality Improvement Patch causing this. It's strange since the database I am accessing is SQLServer and shouldn't be affected by the issues affecting the Oracle Databases.
ArcGIS 10.1 SP1 for (Desktop, Engine, Server) Quality Improvement Patch | Samples and Utilities
Once I went back to an un-patched installation, everything seems fine.