As far as i know, this is the only way to play customs on OFW, which doesn't require Free Pack 1, neither logging in to PSN, so there is no risk getting banned.
Pics proving that it works
C3 CON Tools
USB stick (if you know how, installing pkg through local network works too)
PS3xploit-resigner (for purpose of this tutorial, i'll assume you know how it works and you've already dumped your idps and act files, if not, you're propably using different exploit, here is the perfect place to start)
For the first time, you'll need to run C3 Con Tools and select PS3 converter, this will create folders you'll be using to convert your songs, after that create empty text file called songs.dta in "C3Con Tools\ps3\Merged Songs" folder, you need to do it only the first time, after that everything will be done by C3Con Tools automatically.
Putting our customs in a custom package
If you want to save some space on your PC, you can delete the songs from Merged Songs folder, be sure to delete only songs folders, and to KEEP the songs.dta file there, otherwise after installing new songs, previous will disappear, even though they are on your PS3 disk.
Credits to clayson from psx-place forums, for his modding Skyrim guide which helped me a lot while i tried to make this work, and to TDCMark for this thread. If anyone wants, you can copy, share and modify this tutorial, just be sure to credit me