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Unfortunately you can't do it preserving your old 5.x baseband. If you want to make the leap to 4.2.1 you will need to use the iPad 6.15 baseband. Be aware you will likely lose GPS services and it will be a tethered jailbreak unless you have an early bootrom 3GS.

EDIT: If you have an OLD bootrom 3GS you can preserve baseband and be untethered. I'm assuming you have a new bootrom unit.
 
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It seems to have worked! :)

I do indeed have the old bootrom 3GS version as it was one of the early releases (in fact I got it a day after it was released) and the baseband seems to be the same 05.11.07. I was able to simply restore via iTunes and am now in the process of restoring all my info.

One initial thing I have noticed though, is that the service signal bars on my phone seem to be lower than they once were. I wonder if this is an issue or the phone being more accurate with respect to the cell service from my house?

Thanks for your help and feedback!
 
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