I agree with you down the line. In order to win, we each need to (dare I say it?) "compromise" a bit, or at least show some flexibility. While not my ideal candidate, I would be willing to vote for Rudy -- he's supportive of Bush's foreign policy, the war on terror, I believe he would be a good administrator, fiscally responsible, and he considers Reagan as his prime example of leadership. Rice on the ticket would be a signal that Bush's foreign policy will continue to be pursued. I don't know enough about Allen to have a real opinion. He seems to be most conservatives' ideal "conservative," which would be fine, but does he have the appeal to stop Hillary in her tracks? Governors?...Who knows. Thank God Arnold can't run.
A lot can and will happen between now and '08. For the short term, I hope that Bush regains his form, that he can declare victory in Iraq over the next two years, and that the '08 election will be over whether to continue his policies on the WOT and foreign policy in general. The '08 election will also be about driving a stake through the heart of the Clinton dynasty. Again, it won't be as simple as "right-vs.-left."
It never is, because the majority of the public does not identify that way.
Re GWB regaining his form, as with most things in life, there are positives and negatives to the 22nd Amendment which term-limited presidents. On the negative side, they are automatically weaker in their 2nd terms precisely because they are working against a known deadline. Term-limiting the presidency without doing the same to the Congress upset the balance of power between the two branches.
Congress-critters and senators who must still face voters, and who may have presidential ambitions of their own, have every incentive to separate themselves from the president -- in fact, to use the president as a political punching bag in order to further their own agendas.
When a seditious, frequently anti-American, let alone anti-Republican mainstream media is factored into the equation, 2nd terms have become almost an exercise in futility. I'm tempted to say especially for Republicans, but we've only had one two-term Dem presidency since the 22nd Amendment was ratified, and Clinton's 2nd term was hardly a picnic for him or for us.