With the heartbreaking Mumbai Indians loss to the Rajasthan Royals, Indian fans get to feel the angst that goes with a city based franchise. Unlike national teams that we support unconditionally(think Harbhajan), our relationship with a city based franchise is more complex as we get bombarded with more up to date information and get to experience them more up close and personal. Plus there are more direct viewing opportunities.
Now we know why Wankhede games have a different feel compared to the DY Patil games. Apparently 70% of the Wankhede tickets are sold inhouse, so it leads to a grumpy knowledgeable crowd, very much like a British crowd. DY Patil has not yet gathered such a crust, plus it is a bigger stadium. But the IPL finals will not have any such allocations, so a true fan can watch the game more easily. Ofcourse there is always a danger of a rabid crowd like the ones you see at Eden park. But that is probably more a sign of a dead city; Mumbai folks typically are more diverse and will not be subject to such combustions.
Mumbai Indians are not out of it yet. A loss by Chennai Superkings can still open the door for Mumbai. And with the semifinals and finals in Mumbai, they will be a very difficult opponent to beat.
As Shane Warne has indicated, having semifinals at a "neutral" venue is not a good idea, there is no advantage for the top seed. Infact, if the local team scrapes through to the semifinal, mentally they end up becoming the top seed due to the support that they will receive. The semifinals have to be held at the home team ground. The finals can be at a rotating prearranged venue as it allows for better planning and showing off of the climactic event of the league.