Not a total disaster, but not really close to what was needed. Movement conservatives have gotten behind Romney, not because they love him but because he has emerged as the conservative alternative based on the positions that he has taken - lately. In part, this was because he was self funded. People like Brownback, who may have filled this role, could not get enough traction to raise money. '06 hurt as well in that it eliminated people like Santorum and Allen who may have taken a shot. Thompson didn't want it as bad as you must. Giuliani adopted a bad strategy, was wrong on a very important issue and had a past that doesn't play well past the Hudson.
The difficulty is that Romney has little appeal beyond his position papers and, unlike movement conservatives and liberals, most people don't choose based entirely on issues. There may be some wisdom in this given that events tend to move people off their campaign platforms and from what they have done in the past.
That "wisdom," rightly or wrongly, seems to have come to the conclusion that Romney can't be trusted. While there is certainly mathematical room for him to come back, there is no reason to think that he can change the way in which he is perceived.
For my conservative friends, keep a few things in mind:
1. McCain now needs conservatives. He will need them if he wins. People don't get to be nominated for President without the ability to attend to political realities.
2. One of McCain's weaknesses (and strengths) is that his personal experience forms his public stance. Some of what we have seen from him is a response to conservatives rallying around Bush. The MSM loves him now. That will change dramatically when he is running against Obama or Clinton. History tells us that he will react to that.
3. This notion is that we need time in the wilderness is wrong for at least three reasons. Six of the justices on the US Supreme Court will be over 70 during the next Presidential term. While four of those six are in the Court's liberal wing, the next President may be able to dramatically change the balance of the Court. This cannot be changed by a future GOP President until those Justices retire or head on to the ultimate decision conference. Foreign policy mistakes, including a precipitous withdrawal from Iraq, will also have consequences - even deadly ones - that cannot be reversed by a future GOP president who will simply change policies.
In additon, it is quite possible that the next administration will have to address a resolution of the social security/medicare mess and act on health care in a way that it will be very difficult to reverse. Do you really want to be completely absent on that?
We assume that we can just lose and come back in four years. I believe that an Obama or Clinton presidency will harm the country. I am not so sure that it will be unpopular (particularly if the nominee is the engaging Obama.) It is far more likely that McCain, who will almost certainly be a one termer, would pave the way for his Veep.
Conservatives who are trashing McCain and saying that they will never support him are missing the big picture. If you think that there is no significant difference between John McCain and Clinton/Obama, you are not paying attention.