Thats what I originally thought too, but the last I read about this issue, there were people suggesting that there was a chip inside the 360 that allowed for HDMI through the multiAV when a MS cable came out for it. I believe if you do some searching, there were multiple people who still visit regularly who believed this, and I think at some point Dave was suggesting this was a possibility too.
Ahh, you should have said that in your first post. Its still crazy, but at least makes sense.