(CNN) Hinting that she believed she was on her way to victory in Iowa, Hillary Clinton said Monday night that she was breathing "a big sigh of relief" -- and her crowd at Drake University was triumphant.

But she left the stage before all the votes had been counted.

The Hawkeye State was not supposed to be this close for Clinton. Not again.

She worked tirelessly to correct the many mistakes of her 2008 effort — embracing voters and wooing them at intimate events. Her ground game was lavish and organized with military precision.

And yet Clinton found herself once again struggling to prove what is supposed to be the selling point of her campaign: dominance and electability.

Instead, even if she eeks out a win late tonight by a fraction of a percentage point, the Iowa caucuses looked like a defeat for the former Secretary of State. Once again, she has been knocked back on her heels by a challenger who her campaign did not take seriously until late in the race.

"It's rare that we have the opportunity we do now," she said in a speech that didn't explicitly claim victory. "To have a real contest of ideas. To really think hard about what the Democratic party stands for and what we want the future of our country to look like."

There is certainly a contest. Sanders claimed victory in what was essentially a tie, taking the stage at his victory party shortly after Clinton stepped down.

If there is an upside for Clinton, it is that she can now head into New Hampshire claiming underdog status, a role she has relished in the past and one that paved the way for Granite State comeback in 2008.

In the closing days of the spirited contest, Clinton forcefully drove the argument that she was the race's proven change-maker who could be far more effective in bringing progressive policies to fruition.

The former secretary of state and her surrogates hammered the notion that Sanders, a Democratic socialist, has advanced "pie in the sky" policies that have little chance of clearing the legislative hurdles of Washington.

She drove that message home in an interview with CNN's New Day on Monday morning stating that she was the candidate who could "actually produce real results in people's lives."

But Sanders argued Monday that his rhetoric had launched a "political revolution" against a system that was rigged against the little guy and a promise to address income inequality. As he has drawn huge crowds across the country, Sanders has been riding on a wave of anger among progressives that could carry him far beyond Iowa.

Martin O'Malley, the former governor of Maryland, failed to catch a spark and dropped out on Monday night.

Few Democrats had expected Clinton to be in this position again in Iowa -- overshadowed by the enthusiasm for an upstart rival who has galvanized young voters, including women under 45, around his candidacy.

Sanders told a raucous crowd chanting "Bernie, Bernie" that his campaign had made stunning progress in a short period of time.

"Nine months ago, we came to this beautiful state, we had no political organization, we had no money, we had no name recognition and we were taking on the most powerful political organization in the United States of America."

"And tonight," he said, "while the results are still not known, it looks like we are in a virtual tie."

The two candidates campaigned down to the wire on Monday -- an acknowledgment that they were locked within the margin of error.

Clinton visited her southwest field office in Des Moines signing autographs and taking selfies with supporters. Late in the evening, her aides told CNN's Brianna Keilar that she was playing it safe by fine-tuning two speeches -- one prepared for a loss and the other for the win.

"We always knew it would be extremely close," said Brian Fallon, the national press secretary for Clinton.

Sanders also made an unexpected stop at his campaign office in Des Moines, and calmly watched the caucus results roll in on television.

After Clinton's humiliating third place finish in Iowa in 2008, her campaign has kept a relentless focus on organization in Iowa, as well as New Hampshire and the states beyond to seed her path to the nomination.

Fallon said Monday night that the campaign knocked on 238,000 doors in the final four days, which he noted was a better tally than what the Sanders campaign has publicly disclosed. And Clinton's lieutenants on the ground are rolling into New Hampshire to try to build the same kind of enthusiasm over the next week. Nearly 18,000 volunteers were fanned out across the state on Clinton's behalf and they managed to knock on 51,000 doors Monday, according to the campaign.

Though Clinton faces headwinds in New Hampshire, where Sanders has held huge leads, her campaign is looking beyond next week to the many contests that will unfold in March -- making the case that they have a clear path to the nomination than Sanders.

While Sanders has identified opportunities down the road beyond New Hampshire in caucus states like Colorado, Minnesota and Maine, Clinton aides note that they have had a presence on the ground in those states as far back as Labor Day.

"A lot of the folks who worked so hard over the past eight months here in Iowa, they're trained, they know what they are doing and they will take that model and export it to those similar caucus states where Senator Sanders thinks he has an advantage but where we're going to be able to hold our own," Fallon said.