If he had any sense at all he'd back off, shut his mouth, and see if the story has any merit. Of course, he's too much of an ideological fanatic for that; he'll be sure to dig himself in an even deeper hole while pretending to do otherwise.
This is even better than fabricated military documents. The fanatics in the MSM don't appear to be able to be the least bit objective about anything.
This commercial will probably run in those Battleground states where Kerry is concentrating his campaign. If the commercial has any positive for Kerry at all, it will be at the extremes of his base, who are already energized anyway. For most people the ad will be negative and viewed as a cheap shot.
At this point Kerry has invested a lot in the explosives issue. What may be happening is that his campaign is proceeding full steam ahead on this in the hope they can get away with it through pure brazenness. They hope the media can spin enough to keep some doubt about the issue open until the election.
After that time, it won't matter.