I would just sign the agreement if I were you (although I have no idea what the punishment is going to be if you do). If your network admins aren't bright enough to see what you were doing was a non-intrusive search, you're not going to be able to sweet-talk them into believing you're not "hacking" people's computers.

I wrote/administer the aformentioned search engine, Buzzsearch, at Georgia Tech. I've never had a problem with the network staff - I do everything I can to be a good campus netizen (blocking off campus searching, for example) and they don't acknowledge that I exist. But I'm definitely not doing this for my "ideals", or to "fuck the man", yadda yadda... I sure as hell wouldn't risk my degree for Buzzsearch - if OIT came knocking on my door I'd hand over my server in a second flat.

You're in a bad environment with uncool admins... deal with it and give up. It's not worth possibly fucking up your education.