The Freeh report seems pretty damning against Penn State, all the moreso given that Penn State hired him to conduct the investigation. (Note, however, that he said he didn't give them an advance draft.)
There's an argument that Penn State's misconduct didn't give it any advantage on the playing field, so the NCAA should stay out of this mess, or at least, not give it severe sanctions.
Here's my thought: if Penn State's President, Athletic Director, and most famous/powerful person ever (Coach Paterno) were willing to cover up something as sordid and horrific as Sandusky's serial raping of young boys, what wouldn't they be willing to cover up to protect the football program? How can you trust anything that Penn State has to say about compliance with NCAA standards, etc.?