Note: Some people have said that this resets your MP stats. That didn't happen to me, but if you're working on MP, do that first before attempting this.
You can do this in a MUCH easier way. I beat the game 4 years ago on Easy, and just popped this one now. You don't even have to play through all of chapter 5, just the last checkpoint, which the game conveniently saves for you.
1) Beat the game on Easy. Or Normal. Your choice. You could also beat it on Hard if you want to, that would also work.
2) Assuming you didn't beat this on Hard (and that's why you're reading this), go to the dashboard and move your savegame to a memory stick.
3) Go back into the game and start a new game on Hard. Play through to the first checkpoint. (I went all the way to after the car crash, but you might be able to do this before that.)
4) Exit the game. Go to Options => Game => Select Storage Device. Select your memory stick.
5) Select Continue Game. You will find yourself at the bottom of the lighthouse. Run up and finish Paulie. You'll find that he's quite a bit trickier than he was before... the game has scaled the difficulty up to Hard.
6) The cheeves for Hard and Normal will pop during the cutscene.
For those wondering about the MP glitch... I finished the game in '07. Four years later I went back and did all of the MP cheeves. Then I loaded up my old save on Easy and tried this. Pop! So I didn't have any issues with the MP making me miss the achievement, and the workaround works.