No, spoofing an INS (and there were 3 on a 747 twenty years ago) isn't possible - but operator error is. FAA regs required each INS (Honeywell LN-20 POS) to be programmed by different operators but this probably rarely got done. Either a number was transposed (on all 3 INS only likely if the same tired crewmember did each), or if the aircraft was moved during the programming.
Back in the 1950s aircraft used radio compasses which could be spoofed (the term is 'MIJI') by setting up a stronger signal on a radio beacon's frequency. An EC-130 was tricked across the Soviet Armenian border on September 2nd, 1958, and promptly shot down.
The RC-135 that was in the vicinity at the time KAL 007 first strayed into Soviet airspace was leaving the area. The operators on board probably were listening to FM and getting paperwork ready for post-mission debriefing, so it's unlikely anyone there heard anything. Misawa AB, on the otherhand, probably got a whole bunch of GCI that they didn't know what to do with until too late.
No matter, the Soviets shot it down - the pilot admitted in a TASS interview that he knew it was civilian.
KAL 007 was shot down to avoid an embarassment, since a Russian can suffer anything except ridicule. The only survivers were the conspiracy theories.