I'll try to analyze this conflict from both sides, please bear with me. Hopefully this will bring both parties to an understanding. I'll start with the case of normal users:
The normal users feel like this thread is comparable of one that would normally get locked by the mods. However, seeing as a mod has created this thread, they feel betrayed and insulted. They might be thinking, "How can mods expect us to obey the rules if they are breaking it themselves? Why must we be punished for the same thing they're going unpunished for? THIS IS MADNESS!"
The normal users expect modly justice to apply to every BBS goer, mods being no exception. Seeing as even more mods are backing up the alleged hypocritical mod further enrages the normal populace.
The Funk intended this to be a humorous thread in order to spread epic lulz. However, due to the overt nature of the thread, many have interpreted it as a taunt if you will. Yes... taunt is perhaps the best way to describe this. The normal users may see this as synonymous to "Haha, I can do this and you cant!" However, as previously mentioned, this is most likely not the motivation that drove Funk to creating this controversial thread. His intentions were not malicious, though he probably could've been less, promiscuous when making the thread.
We also cannot discount the possibility of those who are taking advantage of this in an attempt to gain leverage over the mods. However, I believe this pursuit is futile seeing as many of the mods have sided with Funk.
My conclusion is that this is not a controversy, it's just a BIG misunderstanding, a joke gone terribly wrong. Now everyone please make up so the natural order is restored. Besides, I start school tomorrow and I don't want my last summer endeavor to go down the toilet as General did.