I think the reason why you can't use DLC is because of the folders in dev_hdd0/game.

Look at the PARAM.SFO files. Each PARAM.SFO in each game folder has a column called "CATAGORY"..Which can be DG/GD/GS/HG. Just as a guess from common sense, Disk Game/Game Data/Game Save/Hard disk game, although i wouldn't be surprised if i were wrong haha.

Anyways, GD/HG both save in the same folder (above). I don't know where game updates save to, because my PS3 is fresh with no updates for any games at all. However, when you install a hard disk PKG, such as pain, a game folder is created for it named the game ID. And if you install game data, same thing happens. So maybe there is a conflict with PARAM.SFO's when you install a game update?

hahah, I don't know if im anywhere near right, i just thought it was interesting. If you go in a DLC game's files and change the param.sfo to GD instead of HG, it loads in your game data folder. If you install GTA, then change the param.sfo to HG, the game data loads in the XMB.

If you update pain to 6.10, it says "There has been an error with your install."