"what astounds me is that [1] the banks funded all of these LP's [2] moody's and S&P didn't catch on to the actual degree of leverage sooner,"

I really hope to spend some time really looking into exactly what Enron was up to. I looked at these deals for only about 1/2 hour when DYN was in merger talks with ENE, but I washed my hands of the whole mess. What I remember was that most of these deals were ultimately payable in Enron stock at the company's choice, and that none of them had a minimum strike provision. So, a bank would have been able to hedge its risk at any time by selling Enron stock short, no?

I think Moody's and S&P were aware of Enron's leverage, but assumed that Enron would only be liable for a portion of the debts from its off balance sheet entities. I know I read reports where they were tacking on say 10-20% of the off balance sheet stuff.

"and [3] that Enron's publicly traded debt didn't react to the assets sales earlier."

I didn't watch the debt and how it traded, but this is one of a number of aspects of the whole affair which seemed irrational. Enron never did seem to have the kind of credit rating necessary to do a lot of the stuff it was doing. It certainly wasn't as highly rated as the investment banks it seems to resemble. I confess, I never did understand it, and I still don't.