The naked shorting theory is pretty common around the OTC, but as you've said, these stocks are way too volatile and the margin requirement ($4.50 per share) just isn't worth it to make a penny or three per share, in fact it is nuts. Stocks that get hyped up to where you can make a dollar on a short might be worth it if you know the pump is over. It's a good cover story for dilution, though.
You see all that volume before the "pump" of rapid fire PR's, when the share price had 3 or 4 leading zeros? A lot of the sales during the time the stock spent above a penny (and especially above 2) were those shares, the rest being the known 400 million shares converted by "friends of Mike" and the unknown conversions that happened between the end of January and the date the invisible board of directors voted the change to the conversion rate (assuming that you believe they did, since they remain invisible/anonymous).
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