The reason for the '06 losses are people do in fact hate Bush and do generally dislike the Iraq War - the polls are accurate.
People with the idea that if we'd magically run candidates more strongly supporting (insert your obsessive hobby horse issue here) we'd have done better are living in the usual fantasy world.
The entire focus of the Democratic TV ads here in Maryland against Gov. Ehrlich and Mike Steele was, and I'm not exagerrating, "Here's a photo showing Ehrlich standing only FIVE FEET AWAY from Bush."
That is one of three reasons.
The other two are GOP scandals and the leftward drift of the GOP, especially with earmarks. The GOP did not give a compelling reason to voters why they should stay in power.