Regression: Applet fails to load from the <jre>/lib/applet

With 6u18-b03 applets with jars sitting inside <jre>/lib/applet fails to load at all.
Bug is only reproducible with new Plug-in and from 6u18-b03. Bug was not there inside the PIT build against 6u18-b03.
Steps to reproduce:
------------------
1) Copy hostile.jar from following location and copy it inside the <jre>/lib/applet directory
http://sqeweb.sfbay.sun.com/deployment2/jitu/deployment_mustang_exec_ws/deployment/src/plugin/AppletSecurity/AppletSecurity/lib/
2) try to load applet
http://sqeweb.sfbay.sun.com/deployment2/jitu/deployment_mustang_exec_ws/deployment/src/plugin/AppletSecurity/AppletSecurity/html/app_security02.html
If applets fail to load by throwing following exception then bug is reproduced

java.lang.NoClassDefFoundError: Appletmain
at java.lang.ClassLoader.defineClass1(Native Method)
at java.lang.ClassLoader.defineClassCond(Unknown Source)
at java.lang.ClassLoader.defineClass(Unknown Source)
at java.security.SecureClassLoader.defineClass(Unknown Source)
at sun.plugin2.applet.Applet2ClassLoader.findClass(Unknown Source)
at java.lang.ClassLoader.loadClass(Unknown Source)
at java.lang.ClassLoader.loadClass(Unknown Source)
at sun.plugin2.applet.Plugin2ClassLoader.loadCode(Unknown Source)
at sun.plugin2.applet.Plugin2Manager.createApplet(Unknown Source)
at sun.plugin2.applet.Plugin2Manager$AppletExecutionRunnable.run(Unknown Source)
at java.lang.Thread.run(Unknown Source)
Caused by: java.lang.ClassNotFoundException: Appletmain
at sun.plugin2.applet.Applet2ClassLoader.findClass(Unknown Source)
at java.lang.ClassLoader.loadClass(Unknown Source)
at java.lang.ClassLoader.loadClass(Unknown Source)
... 11 more
Caused by: java.io.IOException: open HTTP connection failed:http://sqeweb.sfbay.sun.com/deployment2/jitu/deployment_mustang_exec_ws/deployment/src/plugin/AppletSecurity/AppletSecurity/classes/wwwY/Appletmain.class
at sun.plugin2.applet.Applet2ClassLoader.getBytes(Unknown Source)
at sun.plugin2.applet.Applet2ClassLoader.access$000(Unknown Source)
at sun.plugin2.applet.Applet2ClassLoader$1.run(Unknown Source)
at java.security.AccessController.doPrivileged(Native Method)
... 14 more