In includes/utf/utf_tools.php:

function utf8_recode($string, $encoding)

....

	// convert iso-8859-8-i to iso-8859-8

	else if ($encoding == 'iso-8859-8-i')

	{

		$encoding = 'iso-8859-8';

		$string = hebrev($string);

	}

I found it useless and wrong.
iso-8859-8-i = Hebrew Logical (common, non-reversed)
iso-8859-8 = Hebrew Visual (reversed Hebrew)

Well, when converting from phpBB2 to phpBB3 with hebrew lang pack, which was defined as iso-8859-8-i, the convertor reversed all the hebrew in the new phpBB3.
When disabling this part all works fine.

Well it's quite critical for the Hebrew users to be fixed before the Gold release.