Dropping in a little late, but I read all the posts so far, and what I find is that it seems no one has actually read the article Mr. Pabst wrote.
He clearly stated that the Siemens mobo he used for the test was designed for the Palomino, and in fact was the only one on the market at that time that was designed for use with the thermal diode.
He also asked Siemens' engineers what the heck went wrong, was their board defective or what, and clearly wrote that Siemens' response was that the thermal diode (or the response to it) could only accomodate a temperature change of up to 1 degree per second.
Obviously, with no HSF, a CPU's temperature will rise much faster than that, and that is the reason for the spectacular failure of the Palomino CPU in his tests. But that also raises the possibility that the thermal protection may be adequate in the case of a failed fan - I have no idea of how quickly the CPU will heat up with a properly attached heatsink with a failed fan, but I guess we won't know unless Tom or someone else runs a test under those conditions.