Shorts outstanding are pretty close to meaningless in a low interest environment. A hedge fund can carry a stock both long AND short simply to get around the uptick rule. This will therefore throw all "short interest" figures off. When interest rates are high this would certainly be less productive.
A hedge fund can carry a stock both long and short but it is still illegal to sell the long position on a down tick to get short. This is sometimes done in 2 separate accounts to hide the trade but is against sec rules. I really doubt hedge funds practice this. I looked into this a few years ago thinking it would be my answer to the down tick rule. I had a nice chat with an SEC attorney about it. He said if you get net short including (selling a long position while holding a short position) it must be on an uptick. No way around this. The whole uptick thing is a joke. Thats why I trade futures not stocks. Get short at will