Ooh, option D!
Firstly, whether the site has any obligation to you depends on their terms and conditions. If you assign control of the material to them by posting it then they would not be compelled to remove it at your request. They would, however, still have an obligation to remain in the law and if they refused to withdraw it after being told it is libellous, would be equally liable to a lawsuit.
Secondly, your admission is not the only proof as the site and your ISP will no doubt have logs that can identify the source of the material, which can be subpoenaed if the school or professor pursue this. Your only way out is to comply with the school’s demands as quickly and fully as possible.
Thirdly, a fake posting on a publicly accessible site is not “a joke between two brothers”. Even if the story had gone unnoticed then, it may have turned up unexpectedly any time your victim was subject to scrutiny by another party, e.g. when job-hunting, etc.
Fourthly, I can’t post what my opinion of you is, since it is against forum rules, but I hope the person in question sues you to penury.
That said, msbnews.net was registered by tucows.com. If you go to http://resellers.tucows.com/whois/index_html and look up who owns the msbnews.net domain it will give you contact details for the domain owner. If you explain yourself to him, he may remove the post for you.