What Lubos seems to be saying here is that there was a singularity, as long as we define it as something other than a singularity!
“But there simply is something that is described as a singularity by classical general relativity”
Have I missed something here? GR might predict a singularity, but how can it describe one if the equations of GR break down at that point?
What I interpret he is saying is string theory has 10 dimensions and just because it goes to infinity on 4 of the dimensions (3D + time) which we define as a GR singularity under string theory that isn't really a singularity and that is what he means by the laws of physics could still be internally consistent.
So I interpret he is trying to say a GR singularity is not inconsistent because it is not a string theory singularity.
Lubos answered pretty well directly that here (read response 3)
http://physics.stackexchange.com/questions/5270/black-hole-singularity-and-string-theorySo his answer is prefaced around the idea you accept string theory which because it his blog is self evident he does.
Without that fact you are exactly correct Bill S and I agree Lubos argument is very circular.