There were multiple "jailbreaks" that were never publicized. Teams/Groups had their methods, maybe not full "jailbreaks" as the current implementation of it. Any good hacker worth his weight doesn't let his shit get very far, because they like to keep their hack alive and well and not have it patched. Also as far as him doing it through the music tab...I call bs, false lead if anything

Edit: Also, easiest way to have hacked any game? Developer model allows you to view the data on the HDD unencrypted, as the jailbreak allows you to. So this ability to have Challenge Lobbies has actually been around for a while, and possibly was exploited in this way first, but no where near the level and customization it has now.

There was a glitch on the earlier firmwares which allowed you to install unsigned PKG's through using a TIF image format and ,I think, there was a method similar which involved the glitching of a PS3 Theme. It's easy to believe that you could probably do the same through other file formats.

Why?
Whats the point when the HDD method works?
And before someone else says it dosnt, It does, many people I know use the HDD way, think about it, if the default.self dosn't block a custom patch whilst on a 3.50 standard non jailbroke PS3 why would it block one on a standard PS3.