Unknown said:

Most things we carry in-store and currently have on hand have a negative count in sage... a very large, "this was not a mistake, this was a baffling choice someone made" amount below zero.

"... taken by the dark powers, tortured and mutilated. A ruined and terrible form..."

They may started out with setting up zero onhand for everything and a reasonably correct balance in the G/L.  If there are no 'balance forward' numbers when you run Inventory Transaction Reports, with balance, going back to the original setup date, then that's probably what they did.

Does the inventory list agree to the G/L?   That's usually the first thing to fix.  There is a procedure documented on this site on how to correct the G/L to the inventory list.  If they do not know that it's possible to correct inventory without wrecking the G/L, they might be panicked about posting adjustments.

Sage 50 will do a lot of things (COGS, etc.) automatically.  If the cost set up is wrong, the entries are wrong, and some of the reports are wrong. 

Unknown said:

we "never really owned the product so there's nothing to write off",

Use an Inventory Item only for items where the total value is not insignificant, or where the quantity is important for operational reasons.   You can't afford to spend a lot of time counting a few five cent hardware items, unless they are critical parts and have a significant lead time. 

Use a "Service Item" (as opposed to an 'Inventory Item' for small supplies and all inventory services.  It's still possible to report on the quantity purchased, or sold, but not the quantity on hand. 

Additionally, Use a "Service Item" and check the 'Activity (Time & Billing)' checkbox if your Edition of Sage 50 has Time Slips and you want to use them.

Unknown said:

because of the owners constraints on the issue (doesn't want to do ANY write-offs in the process of fixing the numbers

If they do not know that it's possible to correct inventory without affecting the G/L, they might be panicked about posting adjustments.

The owner may not understand how linked Inventory is supposed to work in an integrated accounting package, or even that it can be fixed.  

Unknown said:

doesn't want the changes to show up as "adjustments" under sales reports for the same reason

The owner definitely doesn't understand how it works.  'Adjustments' will not show on sales reports. 

Unknown said:

and won't switch to a new product that better suits the company needs (even at the behest of our accountant) at least not this year)

Doesn't really sound like the software is the root of the problem.  Inventory was set up wrong, and then operated for years while broken.  Fixing it will take some time.  

Unknown said:

is there ANYTHING I can do?

First, you need to be sure whether they (A) want it never fixed, or that they (B) want it fixed but don't know how, or (C) want it fixed, but not by you. 

Figure out what's wrong (Run and export to PDF or Excel reports @ beginning and @end of year on Inventory (summary As At) to get balances, run associated G/L reports, and write down all the numbers to work out what's exactly wrong.

If necessary, take a Sage 50 course, or work through a tutorial book that has an inventory section to understand how Inventory is supposed to be set up.  You didn't mention whether they are using Weighted Average, or FIFO.  They run differently, and you need to understand how it works, to properly fix it.

Make a test copy of the books with an obviously different name (so as not to put Production data in your Test Company or vice versa).  

Document and make corrections (or some of the corrections).  Once you have made some progress, approach the owner with your solution. 

If they won't accept that someone else can fix what he / she couldn't, or understand and implement the accountant's help, there's Workopolis, Indeed, Monster, etc.   Cut your losses and move on.