In the Olympics, for example, the defending women's world champion sometimes settled for the silver medal, and the woman who won the Olympic gold medal had been the World silver medalist or had not even been on the World podium the previous year ---
1976 - Dorothy Hamill, twice World silver medalist, won the gold medal over Dianne DeLeeuw, the 1975 World Champion and Christine Errath, the 1974 World Champion.
1980 - Annet Poetszch, the 1978 World champion and 1997, 1979 World silver medalist, won the gold medal over Linda Fratianne, the 1977/1979 World champion and 1978 World silver medalist. There really was no clear-cut favorite at Lake Placid-
Annet and Linda were co-favorites, based on their competitive record.
1984 - Katarina Witt, the 1982 World silver medalist and fourth-place finisher at the 1983 Worlds, won the gold medal over Rosalyn Sumners, the 1983 World champion. The media tried to play this competition as a showdown between Roz and Elaine Zayak, but Katarina Witt skated great programs and won, fairly and squarely.
On the other hand, the "favorite" often did win at the Olympics -
Peggy Fleming in 1968, Ludmila/Oleg Protopopov in 1968,
Trixi Schuba in 1972, Rodnina/Ulanov in 1972, Jayne Torvill and Christopher Dean in 1984, Katarina Witt in 1988, etc.
What is really exciting is an Olympic competition in which a number of competitors are pretty evenly matched and the title is up for grabs. In 1980, Robin Cousins, Jan Hoffman, and Charlie Tickner skated a close competition - either of them could have won the gold medal.
In 2002, Michelle Kwan, Irina Slutskaya, and Sasha Cohen all had the opportunity to win the gold medal -- and Sarah Hughes skated through them and won.