I wouldn't believe him if I were any of you. He revealed that he was working on Twisted Metal in 2008 and he apparently got into trouble, and has flatly denied it ever since, even though the pics he posts on his blog has sketches of cars and rough outlines of maps.
It's possible that he may be working on something else, but I doubt that Eat Sleep Play would go through the trouble of hiding an elaborate secret code confirming a PS3 version in the Twisted Metal documentary if they weren't already making it. It just doesn't mae sense.
To summarize, Jaffe is probably lying.