Could it be an inside job by Hendrix non-biological relatives? 

This Jimi Hendrix thing, the estate is pulling the greed card. Give it up. I understand sentimental value, but it’s not that, they only want it back for monetary value ($750k-$1 mil) now that they know the worth. It was bought by a private collector for his personal collection (not profit or to resell), in good faith. He is the 4th person down the line. How was he to know it was supposedly “stolen” ? 
And if it “came home,” after his death, whose watch was it under, where was it, how could it have been stolen? Something is fishy, but the current guitar owner shouldn’t pay the price. If Hendrix’s estate wants the guitar back, give the guy what he paid for it and call it a wash. Guy has his money back & the Hendrix family has his guitar back. The shouldn’t have to lose out b/c Hendrix’s family screwed up. First off, his “adopted” sister became President/CEO of the company that runs his estate. That right there is a red flag. And two, her supposed ex-husband was an employee of the company & supposedly got a hold of the guitar and sold it, then that person sold it to who has it now. Another red flag. Sounds like an inside job. Go after both of them. Neither are blood related to Hendrix.