So does that mean if you saw a transaction floating around the network that has a TX signature with junk padding, you could copy it, remove the padding and resend so the benifactor of that transaction would get paid twice?
No, double-spending is not possible within bitcoin protocol. MtGox didn't see that original transaction went through and re-issued it (automatically or manually - I don't know) with different inputs.
So just to be clear it is not possible to find an Unconfirmed Transaction on the Network with junk padding, copy it and change things like recipient, amount, remove padding and resend?
You cannot change recepient or amount without breaking the signature and invalidating it. You can remove padding though - thus creating a good-looking transaction. If the inputs used in this transaction were not yet spent, you can get this transaction confirmed (included into a block). So basically you will do what originator of this transaction was intending to do anyway, the only difference is that you modify transaction in a way which may be unexpected by some outdated bitcoin software like MtGox's. And that is a known issue since 2011, so reference client and probably most custom clients don't rely on that and are not affected.
Jeez you would think Mt Gox would be looking for ways to speed up transactions, so you would think they would know Miners are rejecting their transactions with junk padding on the signatures and amend any script so as to remove the junk padding and speed up confirmation times. Crazy incompetence.
They became too big and important to care. Just like many banks.
This is my pure speculation, but probably their attempts to speed up transactions actually played role here too. They had partner miners, so they were able to send transactions directly to them, bypassing other nodes. "Network doesn't accept our transactions? Fuck the network, we will go straight to the miners". Until miners finally updated their software.