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http://michigan.rivals.com/
According to Rivals, Ferentz is no longer an option for the Wolverines and will not be the next coach. I'm not a subscriber to Rivals, but the article was reposted in various places and you can get th gist of it by checking out the various Michigan fan sites/blogs.
So big sigh of relief here if it's true he's no longer a candidate. Teh intraweb and its many tubes are bad for my health.
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The first sentence of that article says:
"Rumors of Iowa head coach Kirk Ferentz arriving in Ann Arbor last night were debunked, but his name remains among those at the very top of the coaching search to replace Michigan's Lloyd Carr."