On close reading of this article, you will note that the historians only say that there were no Soviet tanks in the province where Arnold lived. Nowhere do they say there weren't any in Austria, period. Arnold said he rode in his uncle's car to the Soviet Sector (1 of 4 in Austria at the time) and saw a tank. Austria ain't that big, folks. Plausible and at worst maybe he saw someone else's tank but was young and had a faulty memory.
As for the Socialism thing, the country may have been Socialist in effect if not in structure. Eastern Europe wasn't exactly a bastion of democracy at the time and Arnold is not exactly a political scientist. Hell, I think of France as Socialist that way now though structurally they aren't and they would bristle at the label...
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