Depending on how convincing their evidence was, especially in comparison to Bhajji and Sachin's testimony, it could be an entirely reasonable conclusion - i.e. It could be the case that he felt the Australian players story made sense, was consistent, and that they answered his questions naturally and appeared to be being honest. He might also have felt that Bhajji hesitated, was unclear, or gave evasive answers. To emphasise, that is just a possible scenario, and might not be what happened, but something along those lines would explain why Proctor felt that he had to convict Harbhajhan.
That could not be the case, and it will be interesting to see his reasoning, but I don't buy the "you need to be caught on tape before you can be censured for racial abuse" argument. People make decisions based on interviews of people all the time, and in most cases it's not difficult to determine whether someone is being honest with you.
Regardless of all that, its premature to decide he ballsed anything up until his report is released and the appeal heard.