Seattle Control cleared Flight 305 to proceed on the low level airway Victor 23, which is 8 nm wide between Seattle WA and Eugene OR. DME reports 1 and 2 are certainly with reference to the VORTAC at Seattle.
Where they were within the airway is a good question. According to Northwest Airlines and the FBI, USAF radar first picked up Flight 305 about 50 nm south of Seattle and about 1 nm west of the centerline of V 23; the radar plots show the airplane travelling in a straight line on a track of about 190.
I had assumed that, prior to the first radar plot, they had followed the centerline of V 23. That does not have to be the case. If for example at report 1 they were 4 nm east of the centerline, and at report 2, 4 nm west of the centerline, then the distance covered would have been 9.4 nm and the ground speed would have been 142 kt. That would be more compatible with the reported IAS of 160 kt. However I have not thought of a reason why they would track so far from the centerline.