Johnny Franks (@0xjohnny) has just released iOS 4.2.1 GM PwnageTool bundle for iPod Touch 4G. This PwnageTool bundle can be used to patch PwnageTool v4.1.2 which then can be used to create custom IPSW of iOS 4.2.1 GM. The custom IPSW created with patched PwnageTool can be restored through iTunes to jailbreak iOS 4.2.1 GM on iPod Touch 4G.
Update via @0xjohnny:
For those who don't know, Apple released iOS 4.2.1 GM seed last week to fix issues related to Exchange and the audio devices. There are rumors that Apple might release iOS 4.2.1 final version in the upcoming week, skipping iOS 4.2 final version altogether.
Just download iOS 4.2.1 GM PwnageTool bundle for iPod Touch 4G from the link below and follow the step-by-step guide here to patch PwnageTool v4.1.2 with PwnageTool bundle, restore custom IPSW through iTunes, boot iPT4 into semi-jailbroken state and to patch Cydia for iOS 4.2.1 GM.
Download iOS 4.2.1 GM PwnageTool bundle for iPod Touch 4G
Update#1: Download Redsn0w 0.9.6b3 to Jailbreak iOS 4.2.1 GM on Windows & Mac OS X
Update#2: Download official PwnageTool 4.2 for untethered iOS 4.2.1 jailbreak on Mac
Update#3: Download Sn0wbreeze 2.2 for untethered iOS 4.2.1 jailbreak on Windows