Please refer to my previous post at http://immihelp.com/forum/showthread.php?t=44012 to know my problem before reading this.
Looking at my problem, I thought it is better to go through an attorney and hired the company attorney to which I am transfering my H1. She took a statement from me about what exactly happened and the reason why I was out of status. Attorney told to check "YES" for question 38, bullet 4. I filled up 156 & 157 forms and the attorney signed them. She also gave a letter addressing to the consulate which says that my visa cannot be rejected under various clauses. My PA date was 23rd July at Chennai. I went with family (wife & son) for visa. At the pre screening, officer gave back my statement and the attorney letter. I thot I would show the same to CO if he asks me. CO asked me couple of questions about my job & my education but did not ask a question about my out of status period and said that our visas were issued. We got our passports after 5 days.
I dont know if the Consulate knows that I checked "YES" for Q.NO.38 or not. Whatever I got my visa am back in US working for the new company.
All the Best to all your guys.