HOW TO: Create A Custom Firmware and Jailbreak An iPhone 4 Running On iOS 4.2.1 Using An Unofficial PwngeTool Bundle

As always, we don’t recommend you to use unofficial bundles. You should wait on the iPhone DevTeam to drop an official tool. Here’s the story: this is not just a random bundle found on the internet. We made this bundle with our own two hands – and we used them to pull out all of our hair.
It’s still a tethered jailbreak, and you will need a way to boot into the jailbreaking kernel – redsn0w will not help you in this case.
NOTE: if you don’t like to mess with your iPhone – and even if you do – we don’t recommend you to use this bundle. We are not aware all ALL its bugs, so anything could go wrong at any time. We are not responsible for your mess-up. Wait on the iPhone DevTeam to drop an official release.
Requirments:

• iOS 4.2 custom bundle
• PwnageTool

HOW TO Create A Custom Firmware:
1. Download everything on your desktop and extract archives
2. Right click on PwnageTool.app and ‘Show Package Contents’
3. Browse to Contents>Resources>Firmware Bundles> and copy the iOS 4.2.1 bundle you downloaded
4. Now close the window, load PwnageTool and create your custom firmware ( MAKE SURE you install OpenSSH in the process )
5. Once you have the custom firmware , load iTunes and click alt+restore ( hold the alt/option key and click on restore )
6. Browse for the custom firmware, select it, and wait for your iPhone to be restored
7. That’s it. Now you have a jailbroken iPhone 4 running on iOS 4.2.1 – except your iPhone won’t boot in the jailbreaking kernel and now the fun begins…
HOW TO Boot Into The Jailbreaking Kernel:
1. Download and install MacPorts
2. Install libUSB. Open terminal

sudo port install libusb

3. Duplicate your custom firmware and create a folder on your desktop called ‘ Tethereboot’ ( or whatever you want to call it – doesn’t matter )
4. Download the Thetherboot utility and put it in the Tethereboot folder
5. Take the duplicate custom firmware, change the extension from .ipsw to .zip and unarchive
6. Inside there’s two files that you need:

• iBSS.n90ap.RELEASE.dfu
• kernelcache.release.n90

Take them out and put them in the Tetherboot folder along side the tethereboot utility you just downloaded

7. Open Terminal , put your iPhone in DFU mode and type:

cd /User/Desktop/Tetherboot/
./tetheredboot iBSS.n90ap.RELEASE.dfu kernelcache.release.n90

8. Ok, that’s it. Your iPhone will boot into the jailbreaking kernel.
9. Now you will have to SSH in and add Cydia by following this tutorial.
NOTE: again, if you don’t know what you’re doing DON’T DO THIS. Wait for the iPhone DevTeam to drop an official release
Massive thanks to hedsick