When all is said and done, the money taken in goes a hell of a long way towards paying off the money spent. I don't think any country hosting a modern Olympic has broken even but there are intangibles and from what I've gathered a massive revitalization of areas that will keep contributing to the economy. Anyone that has specifics chime in since I haven't delved too deep into the financial nitty gritty of it all.
Think of it like the Hollywood starlet that has to spend a few thousand on a boob job and a portfolio and tape in order to get her career kick started. 
The money from ticket sales and merchandise goes straight back to LOCOG, until they've pretty much levelled out their £2M outlay, so no, the money taken directly in from those areas won't cover the rest. Broadcast rights go to the IOC centrally, and they pay a small percentage of that to LOCOG again, from memory it's something like £400M.
As you've said though - you simply
can't look at only the costs and initial outlay, that is quite frankly an idiotic and heavily blinkered way to look at things. Doing so would be no different than looking at the amount, say, ASDA or Tesco spend on production and packaging and saying 'they spend £XBn a year, they must be making an incredible loss!' without actually bothering to take into account that they then sell their goods...
With the Olympics, many of the venues created will continue to be used and bring in money on an ongoing basis, continually paying rent, rates, VAT, PAYE and various other taxes. Those that are sold will recoup a substantial chunk of money in a lump sum. Many of the venues will result in ongoing or future employment linked to those that will again, continually contribute to the economy. There are other intangibles that will make a contribution, such as current and future tourism, spending in the local and wider areas. Plus, developments in many areas including investment in new rolling stock for public transport and other areas of infrastructure was badly needed anyway, and would have to have been carried out at some point in the near future anyway, so although a linked cost, again is something that was necessary in any case.
No, not all of the gains will be instant (although a certain amount will be), but the last I checked on the predicted figures, one of the major banks (I can't remember if it was the Bank of England or Lloyds), had predeicted that the drip feed from the Olympics will last for something like 5 years before it dries up, and that the actual income to the economy will be circa £16Bn - i.e. substantially more than the estimated £9Bn - £11Bn outlay.
As I say, you simply can't look at it in a short term, spend only way, that's just ridiculous.
Favourite racing series: F1, Indycar, NASCAR, GP2, F3, Formula E, Trophee Andros, DTM, WTCC, BTCC, World Endurance... etc. etc.
