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I'm not sure about the furthest that a non-winnng team has gone in any of the world's many different tournaments, but in the 1990 World Cup there were two notable examples of winless sides doing reasonably well. As Woody in Swindon recalls, the Republic of Ireland reached the quarter-finals having drawn all three of their Group F games: 1-1 v England, 0-0 v Egypt, 1-1 v Netherlands. Jack Charlton's ultra-defensive side then beat Romania 5-4 on penalties after drawing 0-0 in their group of 16 clash. The Republic were beaten 1-0 by Italy in the quarter-finals, having scored only two goals in their five matches. The Netherlands also progressed from Group F to the group of 16 even though they too failed to win a game, drawing 1-1 v Egypt, 0-0 with England, 1-1 with the Republic. It's also worth noting that in the Republic's 0-0 draw with Egypt, neither side managed a single shot on target.