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Three of the biggest implosions in basketball history were presided over by one man - you guessed it, Coach Karl.

1994 -1st-seeded Supersonics lose to 8th-seeded Nuggets

My fourth most memorable Denver sports moment ever (behind the Broncos' back-to-back Super Bowl wins and the Rockies' 2007 World Series run). The 42-win Denver Nuggets upset the 63-win Seattle Supersonics, coached by George Karl. At that time, the 21-game delta between the favorite and the underdog was the greatest in NBA History. I suppose having Gary Payton, Shawn Kemp, Detlef Schrempf and Kendall Gill at the peak of their careers, plus solid vets like Sam Perkins and Nate McMillan just wasn't enough fire power.
Side Note: This feat has since been surpassed by the 2007 8th-seeded Golden State Warriors (42 wins) upsetting the 1st-seeded Dallas Mavericks (67 wins). A remarkable 25 game delta. Sorry, Knicks fans, but your 6-game delta when you upset the Heat in the lockout shortened 1998-99 season doesn't cut it.
2001-02 - Bucks go from conference finals to missing the playoffs
At the midway point of the 2001-02 NBA Season, the Milwaukee Bucks (coached by George Karl) ranked fourth in the Eastern Conference, coming off a season in which they went to the conference finals and lost in Game 7 to Philadelphia. What followed was one of the biggest free-falls in NBA history. The Bucks finished 15-26 in their final 41 games, including losing 14 out of their final 20 games en route to a 41-41 record and missing the playoffs altogether.
Side Note: The following season, Karl recommended trading a 27-year-old Ray Allen - at the peak of his career and with several years left on his contract - for a 34-year-old-free-agent-to-be Gary Payton. The result? The Bucks finished 42-40 playing two mercurial point guards next to each other (Payton and Sam Cassell), and lost 4-2 to the New Jersey Nets in the first round of the playoffs. Oh, and GP didn't re-sign with the Bucks.
2002 - Team USA finishes 6th in FIBA World Championship
George Karl topped his banner 2001-02 NBA season by coaching Team USA to its first loss in the "Dream Team" era. While it was inevitable that a "Dream Team" would eventually lose to an international squad, the resuts of the 2002 FIBA World Basketball Championship were especially embarrassing. Not only did the USA team lose twice en route to a 6th PLACE finish, the games were held in Indianapolis! We lost a friggin' home game!
Side Note: Prior to this tournament, no USA team had ever finished with less than a bronze in international competition since 1978. Even Rudy Tomjanovich was able to coach a team of CBA players (due to the NBA lockout) to the bronze in 1998, salvaging a 2000 Olympic berth for Team USA. This remains one of the most underrated coaching performances in US basketball history.