To quote from his site (linked above), roughly translated:
"This program allows to simulate the dev_flash from USB. Allowing a Custom Firmware. We may modify the files of our new dev_flash (USB) as we please, without running the risk of throwing away the PS3.
It is a beta version, probably find bugs. I will continue working on it when time permits me. Remember that suffers no risk to the console. All that is changed the new dev_flash'll be doing really USB.
• Syscall PEEK and POKE.
1. Copy the "FTP server" the entire contents of the / dev_flash the USB (the root).
2. Copy the JaiC_USB_FIRM_LOADER.pkg also the root of the USB.
3. Install the package.
1. Insert the USB into the PS3.
2. Run USB LOADER FIRM. After a few seconds will return to the XMB. The new firmare is loaded.
You will see that whatever you do the USB will be launched. Ideal for amending RCO, exchange modules, as you imagine.
Do not update while in Live Firmware Mode. It will reboot, setting the original dev_flash back, and then it will update! Do not update from USB FIRMWARE LOADER!"
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Anyone with 2 PS3's, one 3.41 with JB, and one at 3.42OFW, but into JB mode, launch the FTP software. Start FTP service. Take out 3.41's hard drive, and replace with 3.42's hard-drive. Connect to PS3 on PC now. Attempt to access DEV_FLASH0. If this works... upload to a proper DEV for them to clean it for you. There may not be any cleaning to be done, but its better to be safe then $ony.
For everyone having trouble loading this, this method seems to be working for me 100% of the time:
1) 512MB FAT16 USB stick with contents of dev_flash copied to the root using WinSCP
2) Power up PS3 with PS Groove v1.1 jailbreak and remove it after finished booting
3) Highlight JaicraB USB Firmware Loader in XMB, but don't press X yet
4) Insert USB stick with dev_flash contents
5) Quickly press X to load JaicraB USB Firmware Loader
Using this method it seems to work every time for me. If it makes any difference, I have my PS controller plugged into port 1 (charging) and did the Jailbreak/USB stick using port 2. I'm pretty sure the key part is correctly putting the contents of dev_flash in the root of the USB stick (as opposed to creating a dev_flash folder in the root) and the timing of inserting the USB stick and launching the app.
I'm just curious if you've tried hot-swapping the other HDD back in after the PS3 is booted up?
I wonder what happens if you boot the USB Custom Firmware Loader without any USB drives attached, and then do the swap when the error message comes up? Maybe you can load 3.41 back on to your drive at this point by doing the START+SELECT feature. And maybe 3.42 still exists in some other temp folder after it's all done?