Palin defended by a famous liberal Jew; it sounds like the silly talk of this being a mistake is not working: http://biggovernment.com/publius/2011/01/12/exclusive-alan-dershowitz-defends-sarah-palins-use-of-term-blood-libel/
From your link...
Dershowitz: The term “blood libel” has taken on a broad metaphorical meaning in public discourse.
Wow. This might have been a better speech than I first thought... and I thought it was a great one (and it was the one to finally convince me to support her).