I followed this thread for the last few days and was glad to see you managed to get your drive working again and share your expertise with others. However, I'm afraid your trick is not new. It seems using the original DOS based LS17 firmware for the LiteOn (which is not the same as the Traxdata version) can manage it, even without changing the jumper.. The LS17 apparently is helpful for upgrading an 8 speed to a 12 speed, downgrading versions higher than 22/38 or restoring a dead burner. Can't find the url to prove this, however. :(
It looks as if the jumper setting is only needed for making the drive 'swallow' all other firmware, as Dvdwriters said. Besides, in your first posting you spoke about the need to do so to prevent getting the atapi soft reset error message but it is obvious now that this is a matter of booting into dos and thus being OS related.. Nevertheless, you found out what the jumper is intended for. :)
I do have the writer myself but did not f*** it up :) using LS3G23 so have no experience restoring it. Of course, I am very curious if any 'victim' is willing to give it a try using the original LS17 which can be found at http://www.cdrinfo.com/tips/liteon_oc.shtml
and tell us if this works, before using your trick..