Sola Scriptura & Tradition

I am currently engaged in a debate on the Crosswalk Forums about Sola Scriptura vs Tradition. The more I have read and thought, and the more I have debated with die-hard sola scriptura-ists on that board, the more I am having a problem with the doctrine. At least as it is normally presented in a Protestant setting.

Sola scriptura normally presumes that the early church became corrupt very early on and only went downhill from there until it was rescued by Luther. After the last of the Apostles died, there seems to be an assumption that the vast majority of Christians after the 1st century were Christian in name only and so deceived that there was nary a chance of anyone getting into heaven. Aside from the utter implausibility of God allowing His church to degenerate so quickly in light of the scriptural promises to the contrary, I am frequently struck by the utter stupidity of this position as it relates to the development of the canon. How could a corrupt, morally and spiritually bankrupt body be trusted to verify the details of God's word? In the debate, some have acted as if the canon dropped from heaven and did not involve the church at all, while others have tried to claim that the church only recognized what had been in use from the earliest times and was of apostolic origin. I have no real problem with the latter, but it in this discussion, the sola scriptura-ist has all but denied the work of the Holy Spirit in determining the canon and does not have the historical background to know that there were other works, such as the epistles of Clement and the Shepherd of Hermas, that were also widely used and considered authoritative. In short, the canon was not "recognized" very early on and only formally determined later on - the Spirit worked through the church to help her identify those works the Spirit had previously inspired. Such a position also fails to account for how a corrupt church could be trusted to identify the inspired writings at any point, much less a few centuries later.