Your investigation is correct - the kill all EU directive was squashed and S3 HK'ed acft can continue to fly in Europe until they fall apart and/or fall foul of the emissions rules later this decade possibly (but expect grandad/phase out type extensions) - post 2006 certain airports can introduce their own phase out rules for 'marginally compliant S3 acft', but these airports are basically the larger hub airports see the directive for full qualification
The revised/new directive/direction is on the EU site and is EU 2002/30/EC 26 March 2002 aka 32002L0030 - the kill all directive was/is EU 925/1999 and is repealed in the later directive (Article 15 to be precise)
In the case of the MD80 marginally compliant S3 the new S4 hushkit takes it well within new (eventual) limits
Added:
http://europa.eu.int/smartapi/cgi/sg...doc=32002L0030