It blocked PHProxies as far as I know. Might have blocked CGI and Zelune as well. A fix is bound to come soon, but I'll lose traffic. I don't understand what the point of that is. I mean, they lose on a gargantuan amount of traffic more than anyone else.
As far as school kids go i dont see the problem. Do something productive while you are at work/school. YOU CAN WAIT UNTIL YOU GET HOME TO CHECK YOUR MYSPACE FFS!! No wonder kids are so dumb these days.
Problem being myspaces advertisers don't like proxies. I know I wouldn't like hundreds / thousands clicks from the same IP. Just look at the reason adsense doesn't like proxies. Myspace wouldn't do anything to purposely hurt them, or hurt you for no reason.
Its best not to rely on one source of traffic. I don't usually get in such niches in the first place knowing that i will only have one major source of revenue or traffic.