I just listened to a podcast with Yahoo sportswriters Dan Wetzel and Pat Forde. The story was broken by Forde, who lives in Louisville and is about as close to Louisville athletics as a national sportswriter can be. Wetzel and Forde were in agreement that the allegations seem believable, mentioning the many details, identifying players/recruits who participated and others who did not, etc. Both said that a made up story wouldn't read like this one. Also, my thought is that if there were any indications coming from Louisville that this didn't happen (generally, not quibbling over specifics), Forde would know it and say it and he didn't. Wetzel and Forde disagreed over potential fate of Pitino; Wetzel said he'll never be fired while Forde said it's possible.
As for the NCAA investigation, Forde said that what will likely happen is the NCAA will talk to recruits/players allegedly involved (at Louisville and those who chose to play elsewhere) and threaten immunity for those who tell the truth and ineligibility for those who don't.