Just saw this via CheapyD's twitter message.
I think it was probably social engineering again, and not an actual hack. The Indians probably didn't know who Major Nelson is, so they got social engineered again.
That's how the asshats were doing it back in the Halo 2 days.
And for another, I doubt MN would use a @live.com email address on his account. I would guess he would use his MS or Xbox.com one.