Here are the details. You figure it out.

Our gang scouted a war target Paladin.
We had a proteus / cynabal on the side of the gate that he landed on to push him through.
We had a 920 scan res legion and another proteus on the other side. All of us were Public Enemy and at war with the target.
The target jumped gate with the Paladin.
4 of us locked and began to fire with our Safety lights on green or yellow. Not reds.
The paladin went into armor as he was being bumped 20km off gate.
The pilot of the paladin ejected from his ship.
The paladin pilot left his corp (yes in space).
He then boarded the ship while we had it scrammed.
Concord killed one proteus.
The rest of us could not scram him or fire guns but had lock.
Our drones continued to agress while the paladin pilot repaired his damage.
The paladin warped away and told us in local how he had done the exploit.
He then asked us to post it on the forums if we were mad about it.
CCP.... are you mad about this post? I have screenshots.

People talking about limited engagement timers don't understand the basic mechanics. You only get a limited engagement timer if the target shoots back.

Various mechanics were employed here to accomplish this:

1. He didn't shoot back, so he didn't get a Limited Engagement timer.
2. This also meant he didn't get an aggression timer.
3. Without an aggression timer he was able to eject from ship.
4. Dropping corp can only be done in station OR in space in a pod only (not ship).
5. He used the quit corp option to drop directly to his default NPC corp without having to wait 24 hours to drop roles.
6. A locked ship cannot be boarded except by the owning player, as he was the last pilot in it he was still the owning player (I believe people in the same fleet as the people doing the locking can also board).
7. People who continued to aggress the now neutral player got Concorded. For that to happen the player that died must have had his safety set to red. The OP claims they were all Green/Yellow. I would dispute that, but he may have been lied to by the pilot that died, it is common to cover up a stupid act especially when "exploit" was being shouted.

The bug that appears to have been highlighted by this incident is that drones continued to attack the now neutral player. However, this was partially cancelled out by the fact that they didn't evoke a Concorde response for their owners.

Did the Paladin pilot use an exploit - yes! Do I want it fixed, hell no! This is one of those case of 'be careful what you wish for'. We're all whinging about the 10 second session counter for switching ships in Citadels. I can imagine CCP making a ham fisted attempt to fix this (like no ejecting or switching ships while you have a logoff timer - 15 minutes after being shot at). We are already suffering major PITAs as the result of other bandaid fixes. I say let the Hi sec carebears have a way of saving their blingy PvE ships from leet PvPers too scared to go to low, null or WH space.

Enjoy it while it lasts. In the end there will be nothing left to argue about and the carebears will have the chatroom that they always wanted.... ill be playing a newer and more interesting game with the rest of the entertainment.