The fact that the NSA finally agreed to allowing PGP to be distributed would suggest they've found a way to break the code, either by breaking the encryption scheme or via a back door. The law equating encryption technology with weapons systems has not been revoked.

As for the code book, the article says that French investigators found it, not the FBI. I'm not saying the French authorities are any less competent or capable than ours but sometimes politicians like to leak juicy stuff to the press to make themselves look important (e.g. Hatch). Personally, _if_ the story is true, I believe whomever leaked it should be castrated with a dull and dirty knife without benefit of pain killers.