Either Greece is hosed, or we're all hosed. Most likely the latter.
If Greece leaves the euro they will have to revert to some other currency. The most obvious course of action is to go back to using the drachma. Since the government can't pay its bills it is almost certain that the drachma would drop substantially in value almost instantly, leaving the Greek people impoverished and all imported goods cripplingly expensive. This option would result in the Greek debts being more or less written off because they wouldn't be able to pay them, so lots of international banks would end up losing billions. There would be huge amounts of political egg on political faces as the euro project would be seen to have failed. International speculators would look to figure which weaker euro economy would be next out and pile pressure on them, so the likes of Italy, Portugal, Spain and Ireland could be expected to come under fire and potentially be forced out of the euro. Odds are high that ultimately European taxpayers will end up picking up the bill.
If Greece stays in the euro they will need a huge bailout, which makes little long term sense when the problem is that they can't pay their existing debts. The huge bailout will come from the same banks who are already exposed to more than Greece can ever repay. The austerity required to repay the debts will probably lead to civil unrest sooner or later as personal debts don't go away even if you lose your job. If a collapsing currency wipes out the real value of your debt it still doesn't help much if you don't have any income to speak of to cover it. Of course if your debt is in euros and your income is in rapidly devaluing drachma you're really hosed. So that then leads back towards the first scenario, if the people rise up and demand the country leaves the euro.
Since the Greek Syriza government is a hard-left government, if they do get their way in Europe and get a lot of their debt written off then other governments across Europe will be on very shaky ground. Such an outcome could do little other than mobilise the hard-left parties in the weaker nations, so the current governments would face a very real threat of losing power so Syriza-like parties who would run on a similar platform of going to Europe and refusing to pay their debts. It's very true that if you owe the bank $1m you've got a major problem but if you owe the bank $100m the bank has a major problem.
The real fun comes with guessing just what weird financial concoctions are dreamed up behind closed doors, because one way or the other the taxpayer is going to end up with the bill. The banks don't want to lose money, the politicians don't want to lose influence, and the taxpayers who get stuck with the bill are too busy arguing over minor political differences and Kim Kardashian's latest exploits to unite and turf the career politicians out of office.
