Okay, I too much time trying to understand exactly what 538's numbers are trying to say, and I finally figured it out (helped by the fact that their numbers are similar to Massey's, which my Monte Carlo simulation uses):
* "Wins conference": The chance Iowa State will make it to the Big 12 title game and then win the title game. My simulation has that as 24% (gets to title game) * 35% (wins title game) = 8%, about the same as 538 (7%).
* "Wins out": The chance that Iowa State will win all its regular season games and, if it goes to the Big 12 title game, the title game. My simulation has that as 25% (wins out) * [19% (doesn't get to title game) + 81% (gets to title game) * 35% (wins title game) ] = 10%, about the same as 538 (9%) -- if all that makes sense. It's kind of a weird statistic in Iowa State's specific case.
All that helped me make sense of my main confusion, which was the 57% 538 has for Iowa State in "wins conference" when you check "wins out." To sum it up: There are two scenarios if Iowa State "wins out:" One in which they win out in the regular season but don't make the Big 12 title game (19% of winning out possibilities in my simulation), and one in which they win out through a title game victory (28% -- the 81% * 35% part from above). Divide wins over total possibilities: 28%/(19%+28%) = 60% in my simulation, about the same as 538. Again, a weird statistic in Iowa State's case, since it's taking two very different "wins out" scenarios.
So, uh, way more information than anyone reading this needs.