I wouldn't say either of those options is necessarily bad, both are just very big unknowns. There are a couple things that make me think Mooney's defense can still work with the proper personnel:
1) Our defense was very good last year. We successfully did all the things the matchup-zone traditionally excels at (low 3FG%, low 3 attempt rate, high forced turnover rate). I don't think it is likely that in the 10th year of the defense no one had figured it out yet, then all the sudden in the 11th year everyone had figured it out.
2) Every team we played against destroyed our defense, not just teams that have seen the defense for the past decade. Even teams and coaches we had never played before had really easy times scoring against us.
It is possible that the new rules are the reason our defense is much worse, and that even with the correct personnel it will be ineffective. I think this is more likely than other coaches 'figuring our defense out' explanation. I would suspect the rules rendering our defense ineffective would manifest through increasing the number of fouls we commit, though this is just a guess. However, we didn't commit more fouls than the average Mooney defense and were below the national average in fouling on defense. That doesn't completely disprove the theory though.
I think no matter which is correct, option 1 or option 2, Mooney needs to develop a new defense this offseason and teach it next year. Even if option 1 is correct and this year was just an anomaly I think this year has shown it is completely necessary for Mooney to have an alternate defense. We have seen how low the floor to the matchup-zone is, Mooney needs an alternative defense he can implement when we don't have the personnel for the matchup-zone.