Lynden is already #1. Their game against Squally means nothing for seeding for Lynden. Games against Ferndale counted this season; therefore, Squally has 2 losses that count...Ferndale and BE. If Squally wins, they do get #2 then.
The rest is correct.
Right now if I were to guess the matchups for the playin games next week will be:
Lakewood (CC #1) vs SW (NWC #4)
Lynden vs Sultan
BE (NWC #2 )vs Lake Washington (Kingco 1)
ATM (CC #2) vs Squally (NWC #3)
From there if games went to higher seeds, state seedings would be:
Dist #1 1: Lakewood
Dist #1 2: Lynden
Dist #1 3: BE
Dist #1 4: ATM or Squally.
Burlington really needs a win, while unless Squally pulls an upset or BE loses, they have a tough road ahead.