overstay? impact?

Hi,
recently I heard something about the overstay scenario.. please if someone can shed some light on this?

I applied for extension of tier 4 student visa in march 2014. In June 2014 my college was suspended and was terminated in December. I received a letter from ukba regarding getting a new CAS letter within 60 days or to withdraw the application.

I'm looking to withdraw the application as I'm still under the 60 days time frame.. but I've heard that if I withdraw my application now, the whole 1 years from march 2014 - march 2015 will be considered as Over Stay!

I'm looking to apply for tier 1 entrepreneur visa (200K route) as I've already transferred my funds here in UK (Barclay PLC) as well as I have all the documentations ready for the visa. All I have to do is to go back home and apply for it..
but overstay would mean less chances of getting the visa in first attempt? or will it ban me to apply for a certain period?

can anyone suggest me what should be my course of action here?

p.s I came to UK in December 2010