Morelli is pissed he isn't playing, but that's nothing new. There is some talk about Paterno announcing his retirement this week, because there are a lot of potential recruits attending this week's game, and maybe he feels his best shot at getting them to go there is to announce now, rather than at the end of the season.
Bottom line is, Joe is defeated. He used to inject humor, temper, and life into press conferences even when they lost. The last few have been "I have no idea why we're bad." and "I'm tired of losing" combined with a dejected look on his face, and staring down into the ground. He is realizing he has just run out of answers. I think this is it for him, and it is very sad for me to see it end like this, but he could have retired after 2002 (and if so, they would have won that goddam bowl game).
I think he'll wait until the end of the season, or maybe before the final game of the season, but I wouldn't ne surprised if it happened tomorrow at his PC either.