Jim,
I can see a cab forward running past you. Over the years more information has come to light about previously unknown "last steam" movements in the Bay Area, but I've never heard anyone mention seeing the Del Monte pulled by steam at such a late date. Perhaps you saw a railfan special?

There certainly were a few steam engines active at Watsonville Jct around the time of your visit, but it must have been the tail end of such operations. Then there was special movements like the SP 2-8-0 used for stationary boiler service in Salinas after regular steam service ended.