FlyBe seemed to score an own goal on IOM - BLK, underestimating pax loyalty to Manx 2 and abstracting other pax from their own LPL service. They certainly threw the towel in pretty quickly. Now they've got the patient transfer traffic back, perhaps the motivation to make life tricky for Manx2 has gone.
BHX - IOM is a 55k-60k pax a year route, so should comfortably support double daily plus weekends on a Q400, so repeat of the SOU debacle seems unlikely.
TIAC - I'd agree regarding FlyBe's wider business style and ethics, and you are right that at some point they might feel they can hold the IOM to ransom, but I don't see any evidence they've shown any inclination to do this so far. Apart from a bit of seasonal and credit crunch trimming, the route network and frequencies compare favourably to what we enjoyed in Manx Airlines days, and I don't recall anyone being too bothered about their dominant market position, at the time.
Also, with the exception of Scotland, there is still reasonable competition to most areas of the UK, even if it is less so to individual destinations.
Anyway, it all keeps things interesting.
Again, good luck to the Eastern folks.
What are the odds VLM will actually come back at the end of the holiday season?