He was interested in Michigan but the interest was not mutual. Dave Brandon was a member of the Lloyd Carr faction and at that time Lloyd wouldn't allow Brandon to explore it. Lloyd was still pissed that Jim called out the football program for lowering its academic standards while Lloyd was coach. It's only in the last couple of weeks that Carr declared he was staying out of the current search and endorsed Jim as a candidate for the job.
I do remember Harbaugh calling them out back then, and you are right about the Carr stuff ... I've heard that several times, too.