It was no coverup - they expected the missles to fail. Unable to maintain them properly.
Maintenance - therein lies the cause of the Kursk disaster, and will probably account for more mishaps in the future as it seems Russia isn't in a big hurry to insure the safety of it's sailors. Russia no longer has the dough to devote to maintaining the 'big boy' toys, but it would rather pay in lives than remove such devices from it's arsenal.
I seriously doubt they would have tried to launch missiles they knew to be faulty right in front of their president. That would be seen as an embarrasing loss of prestige. Look into the Kursk incident, particulary Moscow's reaction to it, for a run-down on the role 'face' plays in Russia's upper echelon.