The moderation right now is totally messed up. It is extremely biased. I have seen on several occasions people get moderated for friendly banter like "What are you smoking" simply because it is opposite of what the general consensus of people seem to believe. Meanwhile, I've been blocked from reporting stuff (saying it was viewed as alright), for extremely offensive things when the person is in line with beliefs. In one case the individual called people that were posting "F(homosexual slur) fanboys" of course with the full slur instead of the (). This is just wrong (not to mention opening yourselves up for bad publicity or even lawsuits). Essentially, moderating is being used as a opinion tool instead of being used to better the community.

This is occurring because of a rather major flaw in how you recruit moderators. No moderator should EVER be recruited because they applied. It has been well shown that individuals that apply for positions of power have ulterior motives. There can be many reasons, but most likely for something voluntary like this, they are either super power hungry or wish to use the position to further their own objectives. Instead (as is done in a number of online games/communities) moderators should be sought out based on their merit and asked by admins to be moderators. A number will refuse of course and while not perfect, at least they were not directly seeking power.

Overall, your moderation system needs a complete overhaul. Despite what you may believe, the community is important to sites such as these and poorly moderating it is a bad idea.