Actually I suspect he really was honorably discharged. If his original discharge had been other than honorable, surely witnesses to the fact would have stepped forward by now and testified to that fact. Kerry's not particularly popular among veterans, (particularly Vietnam veterans), so if he really had been other than honorably discharged I'm sure someone in the know would love to bring it to the public's attention.
We may finally have one! Check out this excerpt from a story in today's NY Sun:
Alas, not the level of detail or documentation needed to prove the point to the public before the election. Unlike with Bush's DUI there's no one at Harvard willing to dig out and leak the old records there.