Quote Originally Posted by Phantom
...I'm confused as to whether the creature dropps teh phat lewts or not. What leads me to this confusion is the use of the word "defeated" in the effects text.
Elan's "Poorly-Planned Illusion" shtick does not cause a wound to the affected monsters. Therefore the monsters are not killed and they do not drop any loot in the room. Elan simply moves them to an adjacent room.

If loot was already dropped in the room as a result of a previous battle, that loot will now be left unguarded in the room. At this point, since Elan is responsible for clearing the room of the last monster, he would have the option of picking up 2 loot (the same as when someone kills the last monster in a room).

Use of the term "defeated" seems appropriate since Elan is indeed successful in his battle roll and is therefore able to inflict his will upon the monsters by forcing them to move to an adjacent room.