As I understand it. ND had Gruden all but wrapped up BEFORE O'Leary but Monk nixed it fearing a "cult of personality". There is a story that Gruden told Callahan, "Pack your bags. We're going to South Bend." before Monk intervened.
White went back to Gruden after the O'Leary debacle. Monk really wanted Ty all along. Gruden pretty much told White to pound sand because "the priest screwed it up." At that point, Monk basically told White who to hire.