OK, answered my own question.
I managed to track down the source of the news, which had been passed on through 2 other people before it reached me.
Turns out that the guy who was the source of the report came down Hwy 5 just before Christmas and was impressed by progress because he hadn't been down the highway for a couple of years. He reported that a fine gravel "cap" had been placed on some of the torture section, which made it easy to drive.
Bottom line though is NO, the torture section HAS NOT been paved. Still takes an hour and a half to get through.
A friend is planning to go north on that section mid-February, so I'll get up to date information from him at that time.
Sorry for getting everyone excited.