To begin with I thought it was because there'd been a php upgrade on the server, so we fiddled with that first. Then I upgraded to WP 2.5 and when it didn't work I went looking for another answer, which lead to the info about the hack.
It does sound like you've got the bug.
I'm not sure if upgrading first or later will make any difference. Shutting down the plugins (except maybe akismet) and then checking the db may be the way to go. If it still doesn't work... I'm not sure. I was OK after that.
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