just delete the game data from the xmb, restart the game and it'll want to reinstall game data from scratch. You can then download the individual updates (search this site and you'll find good links), and update back up to 1.09 manually and all will be sweet. If you can't be bothered searching for the update links, you can update the normal way and simply cancel just before it starts downloading the last update (which will be the one that caused you all this fuss!).
There is a known bug after update 1.06. If you strike it (it'll ask you to free 32mb on your HDD), just delete game data again and re-install up to 1.06.
"We all agree your theory is crazy, but is it crazy enough?" - Neils Bohr