Yes, I've finally broken this evil encryption scheme. It took me a lot of work, but here it is: CB2crypt.
This program will decrypt and encrypt _any_ cheat code for CodeBreaker PS2, including version 7 or higher.
UPDATE: Current version is 1.21
You can download CB2crypt here.
I've also included the source code, so you can use/modify it under the terms of the GNU GPL.
Let's get hacking! :)