None of this I know for sure, but was told some years back by a big money donor who was pretty involved in the process.
1. Terry Allen was absolutely at the top of Bowlsbey's list because of previous ties. But Terry (or anyone for that matter) wasn't going to be hired immediately. The University/search committee was committed to the process put into place.....which was interview all their targeted candidates and come to a consensus and then make the offer.
2. Bob Stoops did NOT ask for an offer before he left the interview. However, shortly after the interview was over, he was offered the OU job. He called Bowlsbey to inform him that he had gotten an offer from OU, but that he wasn't going to accept if Iowa could turn around and make him an offer. Bowlsbey couldn't because of the search committee and process, so Stoops accepted the OU offer.
3. Ferentz hit his interview out of the park. He came prepared with detailed notes and examples of exactly how he intended to bring Iowa back to prominence. No coach speak or emply platitudes. Easily the most prepared, well-versed and passionate of all the candidates that were interviewed. When his interview was over, it was a no-brainer that he was the man for the job. Hayden's blessing before the offer was made sealed the deal.
This is how I was told it went down and I have no reason to believe otherwise. As it relates to search committees, I can only hope that whenever Ferentz retires that the UI doesn't make this decision again. In this world of 24 hour news/sports, technology, etc, an AD can't afford to be hamstrung by a lengthy, bureaucratic process once his man has been targeted. For the amount of money ADs are paid these days, they should be trusted with the responsibility to make the hire they see as the best for the University. If they fail, then fire them and bring in someone who can do better.
But to answer the OPs question, Terry Allen was never very close to being the successor. Even though Bob preferred him because of past ties, Allen was never going to get the support of the entire search committee.