All is not lost for the Ottawa Senators.

It only seems that way after Ottawa's sixth straight defeat came at the hands of the mortal enemy Toronto Maple Leafs, a true red-faced, 5-0 embarrassment.

Wasn't it just last week the NHL was taking notice during the all-star break of the feel-good story that was the Senators? How quickly things change - and can change back again, if only this team could stop the bleeding.

"We need to take a day, take a breath," said centre Jason Spezza, "and realize we're still in a good position."

Perspective won't come easily today as playoff rivals continue to gang up and move up on a Senators club standing still, but the truth is the Senators remain in a strong position considering their 61 points in the bank and, at the moment, a playoff position still (barely) ahead of the Maple Leafs.

Consider how lightly regarded the rebuilding Senators were in October, and this is all found money - legitimate playoff hopes four months in.

Of course, none of this cheery perspective was top of mind when the Leafs walked out of Scotiabank Place grinning after a destruction of the home team, with the "Go, Leafs, Go!" chants still ringing in the ears of Ottawa fans.

Without question, the Senators were reeling from their toughest loss of the season and second straight at home to kick off a five-game stand (stagger is more like it, at the moment).

On the day of the game, players on both sides sang the praises of a rivalry renewed. How long has it been - too long - since the Senators and Leafs were both in a playoff position this late in the season?

Afterward, the Senators were picking up pieces while the Leafs were blushing over the back-to-back shutouts of goaltender James Reimer, who lost his starting job earlier in the season due to injury and indifferent play.

"I wish I could take credit for it," Reimer said of his shutouts over Ottawa and Pittsburgh. The goaltender rightly credited the "smart, honest hockey" of his Maple Leafs teammates, who have pulled Toronto within a point of Ottawa, while still having three games in hand.

"There's urgency, panic is not the right word," said Senators captain Daniel Alfredsson.

It's all well and good to have the Battle of Ontario restored and both teams playing meaningful games in February, but tell that to Sens fans crying in their Super Bowl chip dip today. Having the rivalry meaningful again only feels great when your side wins.

The local heroes did what they could to rally for the cause, creating two early power plays against the Leafs, but when Ottawa couldn't cash in, Toronto soon did, compliments of two of the players Senators fans love to loathe, Kessel, at even strength, and Dion Phaneuf on a power play.

In the second period, Bozak made the most of a breakaway. Any hopes of one of those steal-your-breath thirdperiod comebacks evaporated when Luke Schenn ripped a shot past Craig Anderson. Toronto's fifth, by yet another defenceman, Cody Franson, was blue and white icing. Make no mistake. The Buds were fired up for this one.

"This was a huge win," said Joffrey Lupul, whose line with Kessel and Bozak registered eight points. "We're trailing these guys, this is a team we marked."

Battle of Ontario aside, the Leafs and Senators are just two of the teams competing on the shifting sands of the Eastern Conference, where there is still room for change over the final two months. And yet, if Ottawa and Toronto are fortunate, the slumping Winnipeg Jets could slip out of this race, making it a manageable nine-team pursuit of eight postseason spots.

The situation is nothing if not fluid. For example, the Senators fell to seventh from sixth place before they broke a sweat - by virtue of New Jersey's afternoon victory over Flyers. That put Ottawa in a position of needing a point against the Leafs just to hold onto sixth, not to mention trying to fend off the Leafs trying to improve on their eighth place.

Every game gets magnified now. Who imagined Friday's tilt with the Islanders, an overtime loss, would be so important? Suddenly, two more on the home schedule, St. Louis and Nashville, that hardly would have registered when the season started, loom large.

If nothing else, the Leafs slaughter, after which Ottawa retained a 3-2 lead in the season series, whet appetites for another playoff series one of these years.

"To really have a rivalry, you need two teams that are competitive, and are battling for something," said Lupul.

On Saturday, one of the rivals wasn't nearly competitive enough, and will have to find itself after taking that collective "breath" recommended by Spezza.

wscanlan@ottawacitizen.com twitter.com/ @HockeyScanner