I could care less who wins this game. Has nothing to do with that. I watched it several times on the ole TIVO. Just what I saw. It was close either way but IMO the receiver had just as much if not more posession BEFORE the knee was down. When I was refing a HS JV game a few years back we had something sort of similar with a fumble. Ball was bouncing all around and two guys kinda grabbed it at the same time. One ref pointing in one direction another pointing in the other direction. Of course we had no replay, but it was an easy decision to give the ball to the offense once we huddled up and talked about it.
I guess you just saw it a little differently, but most (including myself) agree that it was an interception.
In real time I was yelling at the call because I thought the reciever was suppposed to get that call. After watching it in slow mo I can see how they ganve the INT. The thing that makes it wierd is that the DB was holding the ball to his face mask. Imagine if he had it at his chest and the reciever had his hands on the ball then. It would be a INT every time, even in real time.