It fell. The CoC is now the madgod, and is now residing in the SI as the new Sheogorath. It can be assumed Ocato tried to keep the empire together, but failed. Cyrodiil split into Colovia and Nibenese, like in ages past, and all the other countries seceded. Summerset Ilse grabbed Valenwood in order to recreate the Aldmeri Dominion. Black Marsh invaded Morrowind after the Red Year (MoT tell, causing Red Mountain to blow its load). It's likely the areas of Hammerfell, Daggerfall, and High Rock went back to being petty kingdoms again. In Elsywer, the mane was assassinated (huge f'n deal) and it's now anarchy (save for the cities). Skyrim went landgrabbing on its western borders.
Titus Mede then popped up, starting off as a lowly bandit, making his way to warlord, created an army of Colovians, and took over the Imperial City, allowing him to reunite Colovia and Nibenese back into Cyrodiil.
I'll have to dig out my copy of the novel, but I'm not sure that Titus was a bandit chief. Maybe he was a former Legion officer before becoming a warlord? He mentions how many men were in his army when he took the Imperial City from the last warlord before him -- a few thousand at the most.
Edit: Okay, found the book. "Titus Mede had been -- and was -- many things. A soldier in an outlaw army, a warlord in Colovia, a king in Cyrodiil, and Emperor." (p. 108)
"I took this city with under a thousand men. I routed Eddar Olin's northward thrust with barely twice that, and I hammered this empire back together with a handful of rivets." (p. 109).
Well, it could be Titus started as a bandit, but it's vague enough that he might have been ex-Legion, IMO.
I was just about to post this in response to Hellmouth's post. Titus Mede's description as the leader of a bandit army is misleading. People think by bandit, it means the guys that hid in caves in Oblivion. But bandit army is more than likely a reference to a rogue legion.