The reason McCain lost is the Republicans lost the "Leave Me Aloners".That describes my relationship to the Republicans to a T. It is really sad that there is no Leave Me Alone Party in America. I think it might get a few votes.
The problem was that small-government Republicans got swept aside by those who got used to the comforts of Washington. "Compassionate Conservatism" didn't help. Even people like me, who thought the WoT - including Iraq - were necessary had a hard time dealing with Bush's general incompetence in all things domestic.
He kept Congress funding Iraq by rolling over on everything else, which will likely end up being far more expensive to the country than the war itself, both in terms of government size and helping get Obama elected.
Now, given the choice between social-con big government and live & let live big government, any who isn't a bible-thumper chose the latter. (although I personally voted for McCain since WoT is a "voting issue" for me)
Now, the biggest danger for Republicans is to go for the Mike Huckabee "God, Guns & Butter" strategy, which will leave the large Leave-Me-Alone coalition in the Democrat camp for lack of anywhere else to go.
Obama may still overreach with his "communitarian" stuff like mandatory "volunteerism", etc and drive the Leave-Me-Aloners away, but I suspect he's smarter than that.
Cross Posted at Classical Values