Reihan Salam makes some sound critiques of this Patrick Ruffini piece on where the GOP went astray, but I think he's missing perhaps the biggest problem with Ruffini's piece. He writes, for example, that "being sympathetic to the needs of seniors became a $400 billion prescription drug plan."
Back in the real world, a desire to appear more sympathetic to the needs of seniors played only a small role in producing the "$400 billion" (I believe it's closer to $600 billion than to $400 billion) prescription drug plan. What happened was that the Democrats had a $200+ billion prescription drug plan that was sympathetic to the needs of seniors. The GOP could have decided to demonstrate sympathy for seniors by supporting that plan. Or they could have decided to stand up for small government ideology and opposed it. Or they could have split the difference and devised a cheaper, less generous plan than the Democratic one that still gave seniors some help (perhaps something narrowly targeted at the poorest seniors), combining generosity with fiscal discipline.
Instead, they produced a more expensive plan. Not because they wanted to be more generous to seniors, but because they wanted to be more generous to pharmaceutical and insurance companies than did the Democrats. The trouble is that there's simply a mismatch between conservatism's ideological agenda and the agenda of its financial and institutional base. Jon Chait, for example, finds a new conservative magazine primping for more lenient treatment of white collar criminals. One could interpret this as a sign of a growing spirit of soft on crime humanitarianism on the right. The correct way to interpret it, however, is the same as the correct way to interpret the Medicare bill -- ideological conservative dogma has been abandoned not in favor of moderation, but in favor of even more extreme advocacy of the interests of rich people.