My personal belief is that Paterno was in denial about the whole thing until this recent firestorm. Somebody posted a couple of times today that he "didn't know what was in" the Grand Jury report. Thats entirely possible so he may not have understood the breadth of this thing.
Not trying to minimize, I just think the old man was in a state of total denial and disbelief, regardless of what he was told or thought he was told by McQueary or anyone else along the way. Its not evident to me that he has a total grasp of reality.