there's so many complete dismantling of Michigan highlights I can think of...but one of my recent favorites has to be their 2007 loss at home to Oregon, the game right after App State.
When Dennis Dixon ran the statue of liberty play and faked out the entire stadium, you can just hear Michigan's season flush down the tiolet at that time.
http://www.nytimes.com/2007/09/09/sp...ines.html?_r=0
After Oregon scored on its next two possessions to take a 32-7 lead at halftime, the Wolverines were booed into their locker room. The Ducks’ third touchdown was particularly embarrassing to Michigan. Dixon faked a Statue of Liberty handoff behind his back that fooled Michigan’s defense into running to its right. Dixon kept the ball and ran untouched into the end zone from 9 yards out. Oregon was making it look easy, and Michigan looked unable to do anything about it.