First thing I'd suggest is to do what you can to stop more bad entries. Make sure to implement validation of one kind or another so this is a one-time problem.
Then, if it were me (it's not, but play along), I'd follow Sport's suggestion, and do a one-time select on unique state values, then find the mis-spellings you have, and make appropriate update statements.
It's low-tech, but there's definitely a time and place for that. This should be a one-timer.
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