This is my proudest hack throughout my life, but is it what YC are looking for:
"In 2007 I realised my parents were struggling financially despite what I previously thought were solid incomes and jobs. The increasing cost of living and a stagnant income meant that net pay simply wasn’t going the distance. I wrote to my father’s and mother’s employers asking if he could become self-employed consultants in order to write off high commuting costs and work related expenses against income. Despite the extraordinary nature of the request they both agreed, they thought it “made sense and anyway single clients consultants aren’t that unheard of!”
Not only did I bring about a more comfortable lifestyle to my family they are still to this day self employed and both have more then one client as of today. "
...of groups good enough to make it to interviews, more than half blow the application.
Indeed not surprising. Rephrase what you're trying to say so it brings out why this was so brilliant a hack in the least number of words possible. Rewrite it again.
We're looking for people who like to beat the system. So if the answer to this question is good enough, it will make me go back and take a second look at an application that otherwise seemed unpromising.
It is definitely one of the most important questions in the application. Think of other things you have done that might seem trivial to you but might be really brilliant. Talk to your friends. They might help.
In any case, best wishes for your YC Application.
* Excerpts from http://ycombinator.com/howtoapply.html