LAST EDITED ON 02-13-13 AT 09:23 AM (EST)It is illegal to own an automatic machine gun or pistol without a federal license. In all states. There's a law that was passed in 1934(?) banning private ownership of machine guns in response to the gangster activity of the time.
It is possible to get a federal license to own a machine gun in all states (I think). Unfortunately, there are quite a few legally owned machine guns in private hands.
Three things occur to me about the reports of a machine gun at Bear Lake. One: (as you mention) it might have been the law enforcement weapons. Or Two: it might have been ammo going off in the fire.
From the circumstances, it's doesn't seem likely that it could have been> Three: Dorner or a civilian in the area with a machine gun