Satyam Saga: Case of missing money

Something just doesn't square up in the Satyam saga. Raju's letter to SEBI mentioned figures to the rough tune of declared profits like 5400 crore and of this 5100cr is inflated. So that means actual profits are like 300 cr over a turnover of like 8000 cr. How is that possible and especially over a period of years?
My early days in IT while I was pretty much the end of food chain even then I had to explain a lot if my small team was below the margin threshold. and here is a firm that apparently has a 3% margin over all and its Project managers not realizing that their current project is like at 3% and their previous projects were at like 3% and their friend;s projects are like at 3% and yet they aren't being flogged by senior managers? And senior managers can't be flogging everybody?
And such state of affairs would have leaked out. So how can what is said by Raju be true that that's the extent of over reported earnings and only he and his brother knew. I would expect 2/3rd of the firm to know when there is orders of magnitude kind of differences. and if 2/3 of 50000+ know, all the world gets to know it very quickly. So things don't seem to tally up there.
Then there is the question of why did Raju confess it, why in such dire times? And why did PwC not uncover the fraud. How come only Raju knew? What about the financial analysts of the projects generating the invoices for clients? the finance guy collecting bills etc? Did PwC not check with banks? Was someone in banks giving Satyam false statements?
My initial thought was that maybe Satyam ran out of money for payroll so he confess to get a ligther sentence. But then there is the PwC angle. How come PwC didn't uncover anything? If a bank employee was giving false certificates what abt the other bank top brass who might be reading of a top client's disclosures and finding discrepancies?
Today's Business standard though gave another very plausible answer. Apparently after the Maytas fiasco Raju got Meryl Lynch to come and suggest some M&A activity. Meryl Lynch within 1 week of due diligence noticed huge issues with accounts and walked out. M L would have been obligated to report it to stock exchange so Raju came clean.
Which begs the question if PwC is not lying and they actually saw credible receipts than how did ML discover this? If that's not true then PwC is exposed? Maybe the truth is somewhere in between. The auditors where hand is glove with the embezzlers. But still that leaves the issue why did most of Satyam not realize the extent of fraud? Remember is not like 1 cr inflated to 3 cr, its more like 1 cr inflated to 30 cr which is very tough to carry out.
My hunch is that the real over reporting is not as bad as is made out in Raju's letter. They were earning more than 3%. But somewhere a lot of that money has been siphoned off. Apparently overstating profit while being a crime is a lot less serious crime than actual embezzlement of funds. And it might be done in connivance with auditors certainly in a group lot larger than 2.
Already there are reports in TV of how there are huge real estate investments done by promoters and some very credible people had already leveled charges of politicians awarding huge contracts and land allotments to the Rajus and these charges were levelled earlier.
It seems to be that some very serious crimes have been committed here and many shareholders and employees have been destroyed. This deserves serious examination