I think the fact that John McCain, who's way behind in the GOP primary, had his campaign send out an email touting the fact that he doesn't lose as badly as other Republicans do to Hillary Clinton in polling matchups counts as a sign that these are desperate times for Republicans:
In a matchup against Hillary Clinton, John McCain is the only Republican candidate neck and neck with Senator Clinton and within the poll's margin of error of +/-3 percentage points. Rudy Giuliani trails Hillary Clinton by four points; both Mitt Romney and Fred Thompson would lose to her by twelve points. General election matchups, according to the October 9-10 Fox News/Opinion Dynamics Poll.
It still seems to me that conservatives should probably back McCain. He's pretty conservative, still has a pretty good rep, and has a cult-like following in the press. A McCain surge in the polls would probably also be good for sales of Matt Welch's book on why McCain is whack so that'd be good as well.
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