What does it mean that after withdrawal of arxiv paper 'previous versions can still be retrieved'?
Here is an example of an arXiv paper that has been withdrawn. 

You can see that if someone visits the non-version-specific URL, http://arxiv.org/abs/0812.0848, they will see a notice that the article is withdrawn. There is still a link to the previous version(s), which they can click on to see the original paper:



If someone clicks on the link to the first version, or visits the version-specific URL, http://arxiv.org/abs/0812.0848v1, they will see the original paper without any withdrawal notice.

(You can see other examples of withdrawn arXiv papers with this Google query).