So chances are that the military tracked the airplane across Peninsular Malaysia to the west coast. The military have stated that it descended 1000m, i.e. either 3000 or 3500 feet. Both these new flight leveles make sense from a pilot's point of view. Last known flight level was FL350. FL320 would be a correct level if they turned to a reciprocal or westerly track. If you wanted to be cautious and follow e.g. NAT contingency procedures, FL315 would also make sense. At this point it would appear that someone is atleast in partial control of the airplane.
I think for those of you unfamiliar with this part of the world, it is almost impossible to understand the ramifications of the "saving face" aspect of the information dissemination part of this ordeal...