A couple days later and I've figured it out. Here are some clearer instructions on how to make Morden's V3 Exploit use the new ST.DB which doesn't become corrupted when you mess it up.
1) Find a copy of Mordens_Audio_hack_007_V3.zip or Mordens_Audio_hack_MA_V3.zip
2) Extract either Bondsave.zip or MASave.zip
3) Extract Default.xbe to a temp folder from Udata\4d530017\62d648ebf155\ for Mech Assault or \Udata\4541000d\000000000000\ for Bondsave.
4) Extract St.db to a temp folder from Udata\4d530017\62d648ebf155\audio for Mech Assault or \Udata\4541000d\000000000000\audio for Bondsave.
5) Rename Default.xbe to plane "P" - if you don't see an .xbe in explorer make sure visible extensions are turned on.
6) Fire up a hex editor and open ST.db. There are 2 instances of d:\pbl\p.xbe
In the data field enter 00 00 00 in offsets 410 411 412, and 00 00 00 in offsets 826 827 826. It should now read d:\pbl\p. Three sets of zeros for each instance, the . after d:\pbl\p matters and should not be changed. Save the file.
7) FTP "P" to e:\PBl\ and FTP the edited ST.DB to e:\tdata\fffe0000\music\
7note) P.xbe and P. are both needed in E:\PBl\ for the exploit to work
Make a backup of ST.DB in a different folder, then Rename ST.DB ST.HK, FTP ST.HK to e:\tdata\fffe0000\music\ Then backup ST.HK. Then Rename ST.HK to ST.OR and ftp it to e:\tdata\fffe0000\music\ - back it up as well with the other 2 ST files and P. file
9) Enjoy fat finger fix
A few things here to clear up: Do not change d:\pbl\p to e:\pbl\p, you will get either an error 21 blackscreen or xbox will reboot itself. Using the ST.DB from the zip file rules out the possibility of a contaminated ST.DB.
This audio exploit only gets corrupted from inserting the AV/Pack after the Xbox is powered on. If this does happen than you will have to use Morden's remove Audio Exploit, then install again, then ftp back over the edited files. Simply placing the edited ST.DB in the udata/x/x/audio folder will not do since the install package does not create a P. file in /PBL.