This totally serious.
Before I heard Arnold pronounce “California” the way he does I never heard it said that way. However, with him being Governor of that state now, is his pronunciation the official way to say the word “California” in reference to the state?
There is no “official” pronunciation. But because it was taken from a 17th century Spanish novel, it should be pronounced “cah-lee-FOR-nee-ah” (roughly, ASCII IPA would be: /kalifornia/. Most Californians say “ca-lih-FOR-nyuh” (/k&lIfornjV/)
OK, I gotta ask. How does Arnie pronounce it? I’ve managed to… uh, miss his (no doubt riveting) TV appearances in his new capacity.
“Ka…li…for…ni…uh…baby”, at a guess… 
He pronounces it as a cross between the correct Spanish pronunciation and the coloquial version:
cah-lee-FOR-nyah
That’s the way it sounds to my ears.
Although, when Arnold says it, it’s more like CAH-LEE-FOR-NYAH.
GET DOWWWWN!
I think Arnold put’s a little extra emphasis on the “cah” and, of course, uses a more germanic ‘r’.
I think Arnold put that rogue apostrophe in there too. :o 
Hydrocortisone, as soon as you learn to roll your Rs you can complain about how to correctly pronounce Spanish words.
Hijack:
I was stationed in Massachussetts for 6 months and never did learn to pronounce it to suit the locals, and oddly, just calling ‘one of those damn yankee states’ wasn’t good enough.