Just posting what I found on a quick Google search. I cannot confirm or deny anything beyond that. From what I read (New York Times post and ehow.com video) it was possible, just very difficult and not practical for the average investor since you would have to use a non U.S. brokerage firm.
Other than that, I am not really interested and have no desire or interest in shorting penny stocks, even if it is something you can do lol.