They were at a 7 in about 2/3 of bracket projections (a couple of outliers had them better) that came out on Monday and an 8 in the other 1/3.That is where I disagree. Many thought that by beating just Iowa that Illinois would be in the 8/9 game if they lost out. Winning at Michigan was huge. It puts Illinois in the 7 spot in many brackets (one could argue maybe slightly higher). There is really no opportunity at a bad loss going out. Assume two straight very close losses in Quad 1 games, the resume for Illinois is still very strong compared to peers.
I give a better than coin flip odds that Illinois would still get a 7 seed if the Illini lose the next two. I saw some saying that a loss to Purdue would mean a deep run would be necessary to get out of the 8/9 game. 1 win is an absolute guarantee that the Illini are at least a 7 seed. 2-1 (meaning a win against Purdue) and the Illini are a near lock for at least a 6 seed. 3-1, as you suggest, would actually mean a high likelihood of being in conversation for 5 seed (wins against Purdue and at least 1-2 other Quad 1 wins).
Issue with 0-2 is their raw record looks like a bit of an ugly 19-13. That but a lot of quad 1 wins really screams 8