In the story about the school threats, the newspaper who played down the story did the right thing because who knows what the person threatening the school if they had joined in on the sensationalism. As for the priest, I believe that the paper did the right thing. A similar incident happened in my town.
People put crosses on the side of the road where they died and treated it as a tragedy.
It later came out, and was printed, that they were under the influence of alcohol and were extremely over the limit. The follow up stories were tasteful yet told the truth. It caused a stir but no one could deny the truth. But if it is to protect someone's image as opposed to telling the truth, than you should use YOUR best judgement.