So, just to make sure I'm straight on this...
The team that lost beat down the team that won. The team that got beat down is one of only 5 teams that have a shot at state. The other 4 teams that have a shot at state can be beaten by one of the 2 teams that do not have a shot at state, but just once. If not state caliber team beats state caliber team, then both are eliminated. But if two state caliber teams meet in district play then the team that loses wins state, via the beat down rule.
Got it, thanks for clarifying.