Why do you believe Rudy Giuliani would be more likely to win than Mitt Romney? While I suspect Mitt's being a Mormon probably won't help him, I don't see that as being nearly as big a strike against him as Rudy's gun lawsuits or sactuary-city actions are against him.
Mitt has been preaching conservative positions and thus has some realistic likelihood of gaining support (time and money, not just votes) from the conservative base. Rudy seems to hold the conservative base in concept; even if conservatives vote for him, they won't provide the other support he's going to need.
Rudy is the only one who has been beating the Dems consistently in polls.