Adding TNT exploit workaround fix back; they finally fixed the exploit in CraftBukkit 1.1-RC1, but broke it again in 1.1-RC3. :(

src/com/massivecraft/factions/listeners/FactionsBlockListener.java

@@ -1,6 +1,7 @@
 package com.massivecraft.factions.listeners;
 
 import org.bukkit.Location;
+import org.bukkit.Material;
 import org.bukkit.block.Block;
 import org.bukkit.entity.Player;
 import org.bukkit.event.EventHandler;
@@ -96,6 +97,13 @@ public class FactionsBlockListener implements Listener
 		{
 			event.setCancelled(true);
 		}
+
+		Material handItem = event.getPlayer().getItemInHand().getType();
+		if (handItem == Material.TNT || handItem == Material.REDSTONE_TORCH_ON)
+		{
+			Faction targetFaction = Board.getFactionAt(new FLocation(event.getBlock()));
+			FactionsEntityListener.trackPotentialExplosionExploit(event.getPlayer().getName(), targetFaction, handItem, event.getBlock().getLocation());
+		}
 	}
 
 	@EventHandler(priority = EventPriority.NORMAL)

src/com/massivecraft/factions/listeners/FactionsEntityListener.java

@@ -1,12 +1,16 @@
 package com.massivecraft.factions.listeners;
 
 import java.text.MessageFormat;
+import java.util.ArrayList;
+import java.util.logging.Level;
 
 import org.bukkit.Location;
+import org.bukkit.Material;
 import org.bukkit.block.Block;
 import org.bukkit.entity.Entity;
 import org.bukkit.entity.Player;
 import org.bukkit.entity.Projectile;
+import org.bukkit.entity.TNTPrimed;
 import org.bukkit.event.EventHandler;
 import org.bukkit.event.EventPriority;
 import org.bukkit.event.Listener;
@@ -18,6 +22,7 @@ import org.bukkit.event.entity.EntityDamageEvent;
 import org.bukkit.event.entity.EntityDeathEvent;
 import org.bukkit.event.entity.EntityExplodeEvent;
 import org.bukkit.event.entity.EntityTargetEvent;
+import org.bukkit.event.entity.ExplosionPrimeEvent;
 import org.bukkit.event.painting.PaintingBreakByEntityEvent;
 import org.bukkit.event.painting.PaintingBreakEvent;
 import org.bukkit.event.painting.PaintingPlaceEvent;
@@ -316,4 +321,80 @@ public class FactionsEntityListener implements Listener
 		
 		event.setCancelled(true);
 	}
+
+
+
+	/**
+	 * Canceled redstone torch placement next to existing TNT is still triggering an explosion, thus, our workaround here.
+	 * related to this:
+	 * https://bukkit.atlassian.net/browse/BUKKIT-89
+	 * though they do finally appear to have fixed the converse situation (existing redstone torch, TNT placement attempted but canceled)
+	 */
+	private static ArrayList<PotentialExplosionExploit> exploitExplosions = new ArrayList<PotentialExplosionExploit>();
+
+	@EventHandler(priority = EventPriority.NORMAL)
+	public void onExplosionPrime(ExplosionPrimeEvent event)
+	{
+		if (event.isCancelled()) return;
+		if (! (event.getEntity() instanceof TNTPrimed)) return;
+		if (exploitExplosions.isEmpty()) return;
+
+		// make sure this isn't a TNT explosion exploit attempt
+
+		int locX = event.getEntity().getLocation().getBlockX();
+		int locZ = event.getEntity().getLocation().getBlockZ();
+
+		for (int i = exploitExplosions.size() - 1; i >= 0; i--)
+		{
+			PotentialExplosionExploit ex = exploitExplosions.get(i);
+
+			// remove anything from the list older than 8 seconds
+			if (ex.timeMillis + 8000 < System.currentTimeMillis())
+			{
+				exploitExplosions.remove(i);
+				continue;
+			}
+
+			int absX = Math.abs(ex.X - locX);
+			int absZ = Math.abs(ex.Z - locZ);
+			if (absX < 5 && absZ < 5) 
+			{	// it sure looks like an exploit attempt
+				// let's tattle on him to everyone
+				String msg = "NOTICE: Player \""+ex.playerName+"\" attempted to exploit a TNT bug in the territory of \""+ex.faction.getTag()+"\" at "+ex.X+","+ex.Z+" (X,Z) using a "+ex.item.name();
+				P.p.log(Level.WARNING, msg);
+				for (FPlayer fplayer : FPlayers.i.getOnline())
+				{
+					fplayer.sendMessage(msg);
+				}
+				event.setCancelled(true);
+				exploitExplosions.remove(i);
+				return;
+			}
+		}
+	}
+
+	public static void trackPotentialExplosionExploit(String playerName, Faction faction, Material item, Location location)
+	{
+		exploitExplosions.add(new PotentialExplosionExploit(playerName, faction, item, location));
+	}
+
+	public static class PotentialExplosionExploit
+	{
+		public String playerName;
+		public Faction faction;
+		public Material item;
+		public long timeMillis;
+		public int X;
+		public int Z;
+
+		public PotentialExplosionExploit(String playerName, Faction faction, Material item, Location location)
+		{
+			this.playerName = playerName;
+			this.faction = faction;
+			this.item = item;
+			this.timeMillis = System.currentTimeMillis();
+			this.X = location.getBlockX();
+			this.Z = location.getBlockZ();
+		}
+	}
 }