Eugene, one question I haven't seen asked yet is, "Given the history of blackface in America, how  would a typical  African-American student or faculty person  have felt walking in to that party and seeing the lady in blackface? " 
Do we think he or she   1)  would  have chuckled and said something like 'oh that's a good one, reminds of of those old Minstrel Shows", 
Or,
2)  would  have had a sick feeling  in the pit of their stomach and said 'hey lets'  get out of here."

Not being a black person myself it's not my responsibility to judge, but I'd say the answer to this question would suggest what the appropriate punishment for this professor might be.