Because microsoft effectively did not answer the question in the first thread located here http://forums.xbox.com/xbox_forums/xbox_support/f/12/p/103475/493600.aspx#493600 and locked it, I'm making a new thread to update for the people who were involved in the discussion. (And hopefully let microsoft support know what's going on.) I fully expect this thread to be locked or even deleted, but with some luck some of the people affected get to read this before they do.
The problem (well not my specific problem, but the problem of a number of people having their accounts compromised and microsoft not recovering them to their proper owners) has made it into the gaming media, making the front page of Ars Technica, Joystiq, Eurogamer, and probably more gaming websites I'm not aware of. Hilariously, microsoft did respond to the media saying. "We are working with our impacted members directly to resolve any unauthorized changes to their accounts." Apparently telling people on the phone to "be patient" and refusing to give out any information whatsover is considered "working directly with our impacted members." Gotta love how they flat out lie to the media.
I did finally get an answer from microsoft after I officially filed a complaint with the better business bureau, telling me they were looking into it and would call me next week to discuss the issue. Frankly, I doubt it'll do much good, but it's something. I strongly suggest that all affected users file complaints with the BBB as I did, microsoft is actually taking notice of them. Keep contacting the media with your stories. It's the only way we'll get microsoft to acknowledge and fix the problem.
To microsoft forum support staff members reading this: please report this situation and as well as those of other people in the same situation as me (as evidenced by countless threads here with the same issue and the large number of replies to my initial thread) to your superiors as frenquently as possible. I understand that you would help us if you could, but are either not being put in a position to do so, or are told not to talk about this to users. However I'm sure that you are aware of the ridiculousness of the situation, and that something has to be done. Even if you can't answer us or help us directly, you can be part of the solution and not of the problem by relaying as many of these stories as possible to your superiors, and making them understand that it is a significant issue with the service that urgently needs to be resolved.