Yes, it was an interesting experience. That was the first Ragbrai (it wasn't called Ragbrai until the 2nd year). Donald Kaul lived in DC, so probably easier to get a Masi there, though I'm not sure where he got it.
I remember riding with him going into Des Moines as well. Downtown, on the way to the Register's HQ, we came to a red light, and I looked over and saw him grab a girl's shoulder. He was wearing cleated shoes and couldn't get his feet out of the pedals, so grabbed her shoulder to keep from falling over until he could get a foot out. Must not have gotten a toe strap loosened in time.
As for bikes, there was at least one Paramount, etc. that I saw on the ride. I went with a friend (we were from Cedar Falls) that decided this sounded like fun, so we did it and rode the whole thing, with motel rooms every stop. There was a maximum of about 500 on the ride at its most crowded, but normally around 300 on any given day. A far cry from the thousands on it today. I never rode another one, but still have my patch from that one.