According to reports from NeoGAF and Xbox-Scene, Microsoft has lifted Xbox Live ban from all those gamers who own a modified Xbox 360.
The reports claims that gamers were allowed to login back into Xbox Live but only for short time period, but now the “login” back priviliege now seems to have been revoked once again by Microsoft.
Why Microsoft did this, no one knows. Many websites are predicting that Microsoft were testing their own security in the wake of PSN being compromised, whereas site reports that Microsoft did this because Xbox Live, too, has been breached.
No official confirmation from Microsoft not yet made.
UPDATE: Stephen Toulouse just a while ago wrote on Twitter:
“Banned machines are still banned. Just a reminder that you can’t trust message boards. they all want karma”