The most suspect part of the story is this:
"After setting up a security perimeter, Lt. Pantano took off the cuffs and had the two search the vehicle as he supervised. If it was booby-trapped, the Iraqis, not Marines, would pay the price."
I bet uncuffing already tied suspects and having them handling supposed weapons or explosives is against at least one (or maybe all) among: the Geneva convention, the UCMJ, the ROE for troops in Iraq or just plain common sense.
Don't put your prisoners in a position in which you could have to shoot them and you won't have to shoot them.
And the dead guys were clean after all...