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After some more experimentation, a user of PSJailbreak has found that it possible to load up backups from a DVD-R too. The real 'limitation' though is that the game has to be small enough to fit onto a DVD-R of which quite a few are.
Here are the instructions from Jamal94: 1) Jailbroken PS3 with Backup Manager, running v3.41 firmware!
2) Any Original Game Disc or Any Jailbroken game files
3) Nero or any similar program on your PC.
4) USB HDD
If you have your jailbroken game files skip to step 4
Step1: Launch Backup Manager and Backup the original disc to the Ext. HDD
Step2: Plug the Usb HDD to the pc and Browse to "X:/GAMEZ/[title_id] Ex. "G:/GAMEZ/BLES00188"
Step3: Copy the contents of the [TITLE_ID] DIRECTORY to New folder on your desktop
* Contents of [title_id] a)PS3_DISC.sfb B) PS3_UPDATE C)PS3_GAME
Step4: Burn the Contents of the jailbroken game to any type of disc
* Contents of [title_id] a)PS3_DISC.sfb B) PS3_UPDATE C)PS3_GAME
Step5: Insert the Disc in the Jailbroken PS3
Step6: Launch Backup Manager and load the Disk
* Note: The disc icon will not appear
Now it should launch and you can update and play without any problems!