There are some really big mud puppies in the Nepean. I see them all the time when I'm Bass Fishing either from the bank or in the boat.
Seriously, you could saddle some of them, they are just huge
Yarramundi would be as good a place as any.
Also, up near the Penrith weir and as Jewman says, burley and bread seem to do the trick.
The other option is the Penrith Regatta Centre. They run family fishing days (I think monthly) where you can take the family and catch them. Corn is the go there I believe.
I've never fished for them as I take my boat up river and stir up the local Bass population
, but I've seen guys fishing for them with floats and bread along the bank and the big piles of scales where they've been caught and cleaned!!!!- yuk!!!!