Ok after having read 61.159
I think this is what I get from it

Person starts 121 flying (during the hiring boom) with 300TT and 150 PIC. He can apply for an ATP at 1500 hrs, but will have the restriction until he reaches 2401TT, therefore making the 1200 sic time ( that he used to meet the 1500TT requirment) less than 1/2 of his TT, at which point he may have the restriction removed....am I correct???

But then you have this little ammendment effective aug 20th to boot

Amendment(s) published August 21, 2009, in 74 FR 42561

Effective Date(s): October 20, 2009
37. Amend §61.159 by adding a new paragraph (c)(3); and revising paragraphs (d) and (e) to read as follows:

§ 61.159 Aeronautical experience: Airplane category rating.

(c) * * *
(3) Flight-engineer time, provided the flight time—
(i) Is acquired as a U.S. Armed Forces' flight engineer crewmember in an airplane that requires a flight engineer crewmember by the flight manual;
(ii) Is acquired while the person is participating in a flight engineer crewmember training program for the U.S. Armed Forces; and
(iii) Does not exceed 1 hour for each 3 hours of flight engineer flight time for a total credited time of no more than 500 hours.
(d) An applicant is issued an airline transport pilot certificate with the limitation, “Holder does not meet the pilot in command aeronautical experience requirements of ICAO,” as prescribed under Article 39 of the Convention on International Civil Aviation, if the applicant does not meet the ICAO requirements contained in Annex 1 “Personnel Licensing” to the Convention on International Civil Aviation, but otherwise meets the aeronautical experience requirements of this section.
(e) An applicant is entitled to an airline transport pilot certificate without the ICAO limitation specified under paragraph (d) of this section when the applicant presents satisfactory evidence of having met the ICAO requirements under paragraph (d) of this section and otherwise meets the aeronautical experience requirements of this section.