It's not so much that conservatives have no where else to go - it is because the Republican Party doesn't feel like it can depend on social conservatives. Millions sat out the 2000 election or voted Buchanan, causing a potential Constitutional crisis. With every decision they don't like, the "true conservatives" threaten to bolt to a third-party. The term "fair-weather friend" comes to mind. So Rove and company may be thinking that they are better off appealing to the center rather than the right wing.
If you are tempted to allow Bush to lose just to show the Republican Party they need conservatives, let me give you a bit of a warning - if Bush loses because of the conservatives bolting or staying home, it will be a generation or more before a conservative candidate is nominated again. The party will go further left to find a reliable base, rather than back to the right, and conservatives will be back in the wilderness, like in the 60's and 70's.