The Trojans were once again victimized by an accurate free-throw shooter. Illinois State guard Michael McKenny made six straight free throws in the final 74 seconds.
As a team, the Redbirds knocked down 10 of 12 foul shots in the closing seconds.
USC led at halftime, 30-26, and had a seven-point lead early in the second half. But Illinois State's collapsing, sagging defense eventually took away USC's inside game.
"It was as severe a sagging defense as we've played all year," USC Coach Stan Morrison said. "It was like playing a game against the garage with everybody and your uncle. There were so many people in the paint."
It was Morrison's second disappointment in NCAA play as USC's coach. His 1982 team was eliminated in the first round by Wyoming, 61-58.
Illinois State advances to the second round, where Saturday, it will meet Oklahoma. The Sooners breezed by North Carolina A&T;, 96-83.
In the other second-round matchup Saturday, Ohio State will meet Louisiana Tech. The Buckeyes advanced by beating Iowa State, 75-64, while Louisiana Tech routed Pitt, 78-54.
USC forward Wayne Carlander, the Pac-10 Player of the Year, was scoreless in the second half, taking only two shots. Carlander finished with 10 points, making all 6 of 6 free throws (all in the first half) and hitting only 2 of 8 from the field for the game.
Asked if he was open to shoot, Carlander said: "Not really. And I was fouled a couple of times before I shot."
USC, the co-champion of the Pac-10 with Washington, was staggering at the end of the regular season. The Trojans lost five of their last eight games, and three losses were by a total of six points.
The Pac-10 is not regarded nationally as a strong conference. USC didn't help the image, and neither did Oregon State, which lost a first-round game to Notre Dame Thursday night. Washington also stumbled, losing to Kentucky.
Arizona is the only surviving Pac-10 team, but it hasn't played yet. Arizona will meet Alabama today at Albuquerque, N.M.
Thursday night's game, watched by a crowd of 10,575, was similar to USC's 60-58 overtime loss to Oregon State last Saturday at the Sports Arena.
In that game, Oregon State guard Eric Knox made six straight free throws in overtime, and the Beavers converted 10 of 11 foul shots in the extra session.
Thursday night, USC shot only 40.8% for the game, while Illinois State was 48.9%. Ron Holmes, USC's second-leading scorer behind Carlander, scored only 10 points in the 26 minutes he played.
Glenn Smith, USC's sixth man, led his team with 15 points, getting most of them in the closing minutes.
The Redbirds were more balanced. Forward Lou Stefanovic got 15 points, and three other starters were in double figures.
Morrison had said that playing Illinois State (22-7) of the Missouri Valley Conference was like looking in a mirror. Both teams are inside-oriented, but the Redbirds made their outside shots when it counted, while the Trojans couldn't get the ball down consistently in the second half.
"If we had hit some big shots, maybe the tables would have been reversed and we would have been going to the line (at the end of the game)," Morrison said. "Their ability to hit their shots and our inability to do so was the key. And much to their credit, they didn't miss from the free-throw line."
Illinois State Coach Bob Donewald, a former assistant to Bob Knight at Indiana, said there were four keys in his team's win.
"One, we wanted to control Carlander," he said. "Two, we wanted to put pressure on Holmes and not let him have one of his great happenings. Three, it was important to get strong offensive board play, because they're stronger than we are. Four, we wanted to control their fast break."
USC had only one fast-break basket and was outrebounded by Illinois State, 27-21.
USC, which finished the season with a 19-10 record, had its last lead, 45-44, with 5:20 remaining.
After Holmes made two foul shots to keep USC close, trailing only, 48-47, with 2:58 to play, Illinois State went into a delay game, inviting fouls.
The Redbirds ran the clock down until the 1:14 mark when McKenny was fouled and went to the line. He made both free throws in a one-and-one situation.
USC might have lost the game at this juncture. Smith took a hurried, off-balance 15-foot jump shot with 56 seconds left, and the Redbirds got the rebound.
There was time for the Trojans to work the ball inside, if they could, and possibly get a three-point play to tie the score.
In any event, McKenny was at the line again, shooting and making two free throws after an intentional foul with 53 seconds remaining.
USC just couldn't overcome a five-point deficit, 52-47. Holmes made a pair of free throws, and Smith got three baskets in the final seconds, but their points were offset by the accurate foul shooting of McKenny and his teammates.
Morrison said there were other factors in USC's loss.
"We failed to come up with a key rebound while we were in our zone (defense)," he said. "That may have been a turning point."
Asked if Illinois State was always this proficient from the free-throw line in the final seconds, Donewald smiled and said: "No, some nights we're awful. We made only 7 of 14 when we lost our last game to Indiana State in our conference tournament."
Donewald said it was his scheme to play five men on four, figuring that USC point guard Larry Friend, who seldom shoots, wouldn't be a threat from the outside. Friend wasn't, taking five shots and making only one.
"It was important that we have all five of our kids involved in rebounding," Donewald said. "USC didn't send Friend (who's only 5-11) to the boards."
Illinois State was in control of the game at the end and at the outset, when it spurted to a 19-10 lead in the first nine minutes.
But USC then went on a 20-5 run, with Carlander, reserve center Charlie Simpson, Smith and Friend supplying the offense. The Trojans settled for a four-point lead at halftime and went up by seven twice early in the second half before the Redbirds closed down USC with its sagging defense.