Can I exclude us government obligations in California for my vanguard total bond market index fund even though it shows 40% of assets in us government obligations?

The Calif rule (currently) is that the fund's asset value must be at least 50% of US government obligations or none of it is excludable.

A claim for refund has recently been filed with the Board of Equalization by a taxpayer that challenges that rule. That starts the process of declaring R&TC §17145 unconstitutional and will be decided in court after a probably lengthy period of time.