I just went through this. My upgrade was not lost when I dropped status, but I was unable to check in due to a ticket mismatch. When I contacted Twitter, they booted me from my seat and told me that was where I was going to stay unless I paid to upgrade. I objected to this and called Singapore reservations, who after checking with the ticketing desk, believed I should not have been booted from that seat, put me back in it, and instead fixed the ticket.

http://www.flyertalk.com/forum/delta...ked-check.html