Thanks for trying to help shed light on this.
If this is the case, it would do HN a great deal of good for this system to be made more transparent. I understand that it might not make sense to publish the exact formula or algoritm which could expose "exploits" to those wishing to game the system, but I think it would be useful to at least show how many flags and down-votes a post has received. It would, for one thing, put an end to this speculation.
If it is the case that these extraordinarily fast demotions (#2 to #88 in one step) come from "normal" flagging and down-voting, I would ask: Why the hate? :-) I can say categorically that people LOVE Des' posts—not one gets less that 50k uniques in a week or so. Including the ones that are ripped off the HN home page. If it's simply because Des posts all of his hard work here, I would then ask: Does HN not want good content? And Des simply submitting it does not ever cause it to hit the home page—it takes a lot of votes to get it there. (Which is more than can be said for YC hiring posts…)
I love(d) HN, and it's totally within the rights of YC to do what they wish with it. But situations like this are doing a lot of long-term damage to the trust one can have in it as a source of quality, relavent content.
Disclaimer: I work for Intercom.