When I wrote "everything", I did mean of the prizes that went to new writing and new productions.
For most of us, I don't think either "Xanadu" or "Cry-Baby" were seriously in the running. That was the year that downtown New York really flipped for "Passing Strange" - Stew and the show even made the cover of the Village Voice after they dominated the Obies! - while the more traditional Broadway sector flipped for "In the Heights". People had a good time at "Xanadu", but the reaction always seemed to be along the lines of a fun guilty pleasure.
But you can tell I'm partisan here. I loved that production of "South Pacific", but I would have given the Tony for set and lighting to "Passing Strange", which used the physical environment of the theater in a much more interesting and creative way to tell its story (but beauty always wins at the Tonys).