My impression is that as far as Greek public opinion goes, "will it work?" is currently the biggest open question. If Greece is going to end up defaulting anyway, a lot of people are in favor of just defaulting now and getting it over with, instead of paying huge interest bills on a loan that they'll never be able to overcome anyway. Selling the austerity plan requires selling people on "yes, it'll work", which so far many people don't really believe.
I think as long as Greece's economy is resilient to a default, and the government able extract taxes from it afterwards, it will work.
The creditors will be screwed, but new ones will be ready to lend again to a government with tax revenues and no debt.
It depends how much of the defaulted debt is foreign-held, and how much is domestically-held. If too much the latter, the economy may not recover right away, putting them in a pinch.
