Sony did some type of patch on all firmware versions below 4.82.
Fix:
To be able to sign in and mod your heart out, you will need to do 1 of 2 things.
A. Update your Firmware to 4.82+ Dex Rebug or whatever firmware you choose.
B. Spoof your firmware to 4.82+ using something like SEN Enabler, or SEN Spoofer.
Update: There is also a create account error that will happen even if you spoof to 4.82. To fix this error you must actually update to to 4.82+ to fix it.