At leat one member of the raid posted in his blog that they suspected it to be a bug. At that point, they should have consulted a GM, which they didn't. Cue banhammer.

If one person said something in raid chat during the event that it might be Bug or something and still continue. That's not guessing, that's knowing, I believe that Blizzard might have that prove in the chat logs.

It's not just that though. They knew there was a bug (10 players did the 10 man version of the fight, while another 10 listened) and while they didn't know what caused it, the did use it to their advantage. Quoting from Jinxarn's Blog:

Our rogue Naihiko uses Saronite Bombs in his dps rotation and uses them on every cooldown (1 min cooldown), on our first attempt everything seemed "normal", nothing out of the ordinary happend but on the 2nd attempt we did notice something, the floor got rebuilt after the first wave of Val'kyr's, which we did manage to kill. The attempt after that, it was the same thing, floor got rebuilt after the first wave of Val'kyr's that got killed. Since we noticed that the players got dropped on the rebuilt floor we decided that theres no point in dpsing the Val'kyr's beside on the first wave.

The last sentence is very important. It the admittance that they took it to their advantage. And that is a violation of EULA.

Link to Jinxarn's blog: http://ensidia.com/Jinxarn/blog/4090/

Oddly enough, the links and quotes from the "incriminating blogs" are to posts made after Blizzard applied their hotfix acknowledging there was an issue with the bombs. Basically it looks like we have a bunch of players that thought there might be a bug, weren't sure exactly what it was and kept playing.

Seriously, has it not occurred to anyone that when something seems so obviously wrong, yet makes it through testing into live production, that it's working as intended due to some other part of the game's mechanics? Honestly, if I had a dime for every time I thought an encounter should or shouldn't work a certain way, my WoW subscription would pay for itself. I'd also feel like 3 day old dragon crap if I blew my chance at being The First stop and report a "possible bug", find out it wasn't really a bug (or not important enough to be actionable), and another group got the achievement because I waited on the ticket to avoid a possible exploit.

I think you will find it's not because they kept playing despite smelling the fishiness of it but because they out and out lied like little schoolboys afterwards.

Blizzard are not stupid, Ensidia are though for thinking they could lie their way out of it.

Blizzard are not stupid in any dispute you have with them, They have a complete record of anything you did and everything you said. They can call up those server logs as they need and replay them.

Ensidia deserved to be stripped of the honour and banned, not from the act but from the out and out lies and weasel excuses afterwards.

The funny thing is, it would be incredibly easy for Ensidia to exonerate themselves. They have the video. They have the voice recording. They have the chat logs. If they were actually innocent, they could have just posted the raw data immediately and said "judge for yourselves".