I wouldn't like to see the penalty increased, but perhaps making the road to that penalty shorter would help.
I think the standard ideom of 3 strikes and you're out would work well. Because, honestly - most of us who play regularly don't report unless the tw is really, really stupid or annoying. Christ, I've been tw'd 5 times upon the fall of a seige tower's bridge before and not 'M'd once. And there are others like me, I know.
But some dipshit with a 2 hander swinging hell-mell side to side at the flag, tearing apart his buddies as well as the enemy? That. Shit. Must. End. And I think dropping the /5 strikes to /3 would help.