Where are you seeing `larrys`? The guy you're replying to doesn't seem to be "larrys", and when I looked at larrys profile here on HN I can see there was some recent arguing, but nothing that I would think would merit a ban, and additionally, I don't see a 'inappropriate response from the mods' (but perhaps I'm not sure what to look for; do mods get special CSS styling or anything?). I'm confusered.
You can't reply directly to hellbanned users, so a lot of people reply to the person such a user was replying to, to try to send them a message that they've been banned.
Most users won't see these comments/users. If you go to your user page, you'll see an option called "showdead". Enable that ('Yes'), and you'll see these messages.