I read that it's a VM, but I'm not sure it's Java. Java is the most well known VM, but there are many others. A VM is just a way of running code in a non-hardware specific way. It allows BD+ to run on any hardware regardless of the CPU.
The easiest way to crack it (IMHO) would be to write your own VM that implements the BD+ instruction set and just run the BD+ code in it. I assume they aren't just giving the BD+ VM instruction set/API away, so you would have to reverse engineer it someway. They did a similar mechanism for satellite cards and that's one way they cracked it.
If Sony et al is smart, they haven't played there entire hand and there will be a chess game that will play out over years.
Hopefully Toshiba and co. can flood the market with cheap HD DVD players so we can rid ourselves of BD-Max in the near future.