Having reviewed the Oregonian constitution, and admittedly not being a lawyer at all, I'd say the relevant section is this one:
Section 18. Private property or services taken for public use. Private property shall not be taken for public use, nor the particular services of any man be demanded, without just compensation; nor except in the case of the state, without such compensation first assessed and tendered; provided, that the use of all roads, ways and waterways necessary to promote the transportation of the raw products of mine or farm or forest or water for beneficial use or drainage is necessary to the development and welfare of the state and is declared a public use. [Constitution of 1859; Amendment proposed by S.J.R. 17, 1919, and adopted by the people May 21, 1920; Amendment proposed by S.J.R. 8, 1923, and adopted by the people Nov. 4, 1924]
How the judge can get from that section that it's unconstitutional to require the state to compensate individuals for the restrictions the state places on their land use, I don't know. To me it looks pretty plain that it supports it.
The section is written much more as an "all-or-nothing" kind of thing, not envisioning the idea that the state might say "you bought it outright, but now we've decided that we won't let you use it for purpose X." That seems to me like the state is taking some functionality out of the land for "public use". For example, they might say "You can't build a house on your land because we're protecting the snowy owl habitat there." The state has effectively just declared "snowy owl habitat" as a public use of that land, even though the land overall still belongs to you.
The only restriction removed for the state is the requirement that they have to pay up front. The section clearly allows the state to take first and pay later for public-use requirements. And according to the text of Measure 37, the state is given 180 days after the presentment of a demand for compensation to either pay up or declare an exemption.
