I disagree with your assessment. I think the war was the big factor (with some exceptions). I don't think people were necessarily voting against "big government". Of course Republicans were identified with big government, they were the government. Swing voters are only socialists when they are hurting. The economy has been good so that wasn't a factor now. Compassionate conservatism is a loser NOW. It was a winner in 2000. The times were different then.
OF course the war was a factor and given the closeness - if it wasn't for the war, we'd still have the Senate at least. Heck, if we didn't spend so much money in Rhode Island, we might still have the Senate.
And no compassionate conservatism was not a winner in 2000. Clinton fatigue was the factor - and even that was only good for 48.5% of the popular vote.
Conservatism wins big (1980,1994) nonconservatism loses or wins barely (1996,2000,2004) but with that said, it has to be done in a way that appeals to the individualistic nature of the American people.
Let's just take this as the pause that refreshes and find our identity again.