I think they did restore the film for Blu-Ray:
http://exploderbutton.tumblr.com/post/93358538455/king-kong-vs-godzilla-2008-toho-hivision
From reading the Wikipedia page, Toho took the 1080p version of the English version of KK vs G, took the parts the English copy had that the Japanese copy needed, and only used the 16mm for the few minutes neither version has.
I just got the Japanese version, so I'll let you know how it looks when I watch it.
PS: it was the Japanese version's director who cut the film and threw out the missing portions, not the makers of the U.S. Version.