I think you misread what I wrote. I do not consider that OSU will be top 5. I stated that. They may creep back into the top 10 because the voters, their schedule and lack of another loss. As for the loss to USC. If USC was the dominate team of past, then this loss to USC would may have been a lesser factor. An early year loss to the potential champion.
So a average USC won over a average Ohio State team. USC will probably still run the PAC 10 this year. As far as the OSU vs Navy win. Yes they barely won. The first game of the season. Which is also why I don't give Alabama much props for the win over VT. The first game is an unknown for both teams. This is not to tear down Navy. They have actually made to a bowl game or two in the last couple of years.
Now look at Ohio State's schedule. Their toughest game in October is Wisconsin. The Wisconsin game is a home game. Wisconsin will probably lose 2 or 3 games in conference this year. They also have Indiana, Purdue, New Mexico State and Minnesota in October. There is a chance they could lose to one of these teams. A very small chance. The probable scenerio is that, Ohio State gets into November without another loss, then they could ease back into the top 10. Remember teams like USC, Texas, Oklahoma, Ohio State and a few others seem to get considered where others don't. Which leads into why certain teams get ranked above other teams as in your example; USC vs Washington.
Michigan has a tougher October schedule. On the road to cross state rival Michigan State. Edge to Michigan, possible loss. On the road in Iowa City. Iowa has one of the best home records in the conference over the past few years. Iowa has a good team. Not a automatic win for either team here. Penn State plays in Ann Arbor this year. There are a lot of possible scenarios. Penn State loses this weekend. Then its Iowa, OSU and Michigan. But Iowa has one of the toughest road schedules in the country. That is the one instance of it coming down to Mich/OSU. There are a lot of ways it won't. Penn State wins, Michigan loses to either MSU, Penn State or Iowa. Then its Penn State and OSU. OSU loses to Wisconsin at home.