Aren't the admins also effectively volunteers, seeing as they don't get paid either? Your drawing a line between the two seems rather arbitrary.

Transparency is not always healthy for the game. There are cases (like the extreme example you give) where it is useful, but those should be the exception rather than the norm. The majority of situations will be far more similar to the one that prompted this thread: a bitter cheater comes to the forums and immediately gets sympathy from people who think they're owed something by the admins and mods.

Everyone immediately starts telling the mods they need to do better, and that they're somehow at fault because the cheater is the victim and they've been oppressed and wronged by the evil mods who don't properly communicate, never stopping to consider that there may be more to the story than what has been posted.

What comes from the admins and mods getting involved in that? Either they engage and give people the impression that admin/mod engagement is likely in these situations while failing to actually make anyone happy (seen anyone here say thanks to either Pangaea or martian, and say how they've changed their mind 'cause of this?), or they say nothing and wait for it to die out, while hopefully training the community not to bother asking so they don't have to waste their time delving into that fluff.

For exceptional situations, sure, communicate. But should it be expected? No.