It looks that iPhone dev team has found another way to get untethered jailbreak for iOS 4.2.1 on iPhone 4, 3GS & iPod Touch 3G/4G using iOS 4.2 beta 3 hashes and kernel. As per Musclenerd tweet this workaround seems to work perfectly fine and can be generalized.
If this workaround worked successful then Comex hack for untethered iOS 4.2.1 jailbreak can be preserved. We must tell you that with Geohot’s Limera1n bootrom exploit it won’t be possible for Apple to block future iOS jailbreak without hardware change. Hence for any future iOS update you can do tethered jailbreak but getting untethered jailbreak may not be easy.
The new workaround uses mysterious iOS 4.2b3 hashes which is saved in Cydia. If you have your iPhone or iPod Touch jailbreked on previous firmware then your SHSH would be saved in Cydia but we are not sure whether idevices bought after iOS 4.2.1 release will be able to take advantage of this advantage or not.
Check out below demo video of untethered iOS 4.2.1 jailbreak on iPod Touch 4G.