With great thanks to alephzain the hero now works.
Below is the update.zip for gsm Hero with psfreedom, best way for now is nandroid backup, flash the update, apply hack on PS3 and nandroid restore to return to existing rom.
[UPDATE.ZIP TO FOLLOW]
1. Copy .zip onto sdcard
2. Reboot phone into recovery (I use Clockwork but Amon-Ra is just as good, and may endup better ;p)
3. Perform a nandroid backup
4. Install zip from sdcard and select zip downloaded from above.
5. Perform hack on PS3
6. Reboot to recovery and restore nandroid backup
7. Goto 1 each time you switch on PS3 until a better method is developed
Below are links for the ones that cannot wait for the update.zips
Below are links to zImage as psfreedom.ko (patched for bdvd).
CDMA - http://www.megaupload.com/?d=LR19E62T
GSM - http://www.megaupload.com/?d=A3IWL856
1. Copy psfreedom.ko to your sdcard
2. Install a terminal emulator from the market
3 Fastboot the zImage
4 Once it has booted open the terminal emulator
5 type su
6 type cd /sdcard
7 type insmod psfreedom.ko
8 plug in to ps3 and enjoy