Yes, he'd played for 2 clubs since 1st July and joined Liverpool in the January transfer window. He was given dispensation because the South American season runs January to December so it wasn't really 3 clubs in the same season as they'd finished their season.
Not quite, I said Blackburn could go elsewhere altogether if Celtic won the bidding war without anybody realising in time. That would leave us looking like idiots, and with a player who was unhappy for the rest of the season because we'd done him out of a move and was potentially impossible to loan out for the rest of the season on emergency loans. (If he agrees terms with Celtic in January for a summer move is he going to want to go and play on loan for someone else and potentially get injured?)