I did not know this was possible??

Well I signed Erik Torres at the start of my game, and saw straight away i had enough ST in the squad so thought i would use him as a CAM but i had pastore and my formation used me a CM than CAM, so i got him training. Now I am in October 2012, so just into 4th season and on the squad selection screen his position is M/AM©...he forgot how to be a striker? Never seen this before

My best guess would be that the AI team you bought him from was retraining him to ST. Once he was taken off this training and no longer played in that position, he gradually lost his proficiency there (this is how all retrained positions work).

It does this now because in the last FM when you retrained a players position it used up CA points for new positions but now to save players losing ability points they made it so that if you train a player in a new position then he loses position points in an old position to make up for the ones he is gaining in the position you are training him in.

I trained a right back to be a dc and when i started the training he had a yellow dot for the DM position but after he became trained as a centre back he did not have any dot for the DM position.