UPDATE (2/22/14): A couple weeks after this was posted TriMet's exemplary sign programmer went through and changed the signs to spell the cities correctly. They also added double-lined signs on overheads for 54-Beaverton/Hillsdale Hwy and 35-to University of Portland.
I was informed by one of the veteran bus drivers out of Merlo that the reason these signs were wrong was because TriMet had Gillig Corporation program the signs before the buses were shipped. That way, the signs were ready to go upon delivery. Apparently, the person reading the list didn't have particularly good vision and therefore we had poorly represented cities on our buses.
Someone told me a humorous story about the 3100-sign misspellings that may or may not be true, but nonetheless is entertaining. According to the account, the mayor of Tigard was walking down the street and saw a 76/78 bus go by with the word 'Tigran' clearly written on the sign. He immediately called TriMet and told them, "Hey, you misspelled my city's name!"