There's a nice way you could go about making a primitive mind flayer race work (like the yaggol (sp?) in Taladas). I'm no history major (actually I am) but I've heard that ancient civilizations formed because of one thing: cultivation. Each of the three staple crops (rice, wheat, and corn - going east to west) were developed and cultivated at different stages. Once a crop is cultivated, a society has no need for hunter-gatherer types and it creates something no one has ever had before: free time. This free time is used for a variety of purposes (building, tools, religion, etc) and civilization springs forth.
Coming back to mind flayers, you could have a food scarcity (brains) be a good reason for the society to be degenerate. This has to be over the course of centuries (millenia would be better...but not always plausible). The illithids could be seperated from intelligent brain - forced to eat animals and the like...so on and so on. Something recent has forced the decadant society to "find" human/elf/dwarf civilizations, maybe continental drift - whatever. But this would give you a plausible head start, negate all the arguments against this kind of illithid society forming (too smart, extra-planar, lawful, etc).
Hope this helps!