It looks like the ban is repealed indeed. Though i am not following exactly what is going on. See :
http://www.lighting-gallery.net/index.php?topic=4549.0Sometimes installs like this with recessed can and inaccessible ballast are installed by placing the ballast in the ceiling through the hole, then inserting teh can after it. So the ballast can be accessed by removing the lantern
Setups where the balalst is inaccessible can sometmes be installed unsafely in the 1st place - Ballast laying open (without box) in the void, dust or insulation covering the ballast, cables touching it and so on - in which it can be a fire hazard, especially as it ages. Definitely have a peek inside if you can
MH vs Merc starting : The MH can require a bit higher starting voltage but i guess there is an appropriate ignotor (some 700V) to solve this problem, without hacks of starters and incandescents
Cylcling can happen if the MH lamp's arc voltage goes too much up for the installation - In a ballast with lower OCV this means sharper drop in current supplied to the lamp, and can get to the point where the lamp goes out