Thanks Borgo. USC you were putting up such a hard fight that you had me doubting my poker knowledge, how dare you!
I've never been involved in a bad beat myself, but I have been playing next to many tables that have hit the bad beat. The floor rushes to the table and they have surveillance replay the hand over and over until they are 100% sure it's a legit bad beat. If a player (like the old lady) were to throw their cards in the muck, the hand would be dead and that would be the end of that.
It takes about an hour around here for them to award the bad beat and pay everyone.
On a side note, does anyone else spell "much" when they are trying to spell "muck?" I swear 99% of the time I try to say "muck" I put "much" and have to change it.