You people are silly, and you watch way too much Dragonball Z.
As for the no touch throws, I've definately experienced them. It's definately not a long distance thing. You fall to avoid being hit, pretty simple. I remember doing iriminage with my sister not long ago, (she's ikkyu.) It was fantastic! She just did the motion of the technique and her ki (and movement, me being scared...) made me fall, hard.
For ANON- You should investigate the other dojos and instructors in the area. If there is a legitimate Sensei nearby who is currently not offering classes, speak to him/her, maybe you can start some, or get private lessons. As for your current dojo, I recommend leaving politely, even if you do think the Sensei is a total nut job.
If you can't find a suitable dojo, pick up and move!