Penn is legitimately decent. They already beat Miami (FL) and only lost to Kansas State and Oregon State on neutral site games. Barring further upsets they should get a 13/14 seed to have a chance to make an upset run, especially if they at least split at Toledo, New Mexico, Saint Joseph's, and Temple.
Yes, Villanova is/was overrated, and North Carolina probably still is, too (we'll see when they face Gonzaga before their ACC schedule), but I see Michigan at 16-4 in the BigTen (@MSU / IA / WIS / IND being the toughest games... as I said before, missing @NEB / OSU / PUR is fortunate), which should still be good enough for a 1/2 seed even if they lose on Saturday in the BigTen Tournament.